The last few months have not been easy for the South African beef industry, which has been hard hit by a high maize price, a debilitating drought and a stagnant economy. This has resulted in low weaner purchase prices, and pushed beef prices down, exerting pressure on cattle farmers and the beef industry. Several countries closed their borders to trade with South Africa after the outbreak of foot and mouth disease (FMD) outbreak earlier this year.
The rest of the year looks set to continue to be challenging. The Crop Estimates Committee’s (CEC) forecast for this year’s maize crops is 10.5 million tons, which is 16% less than 2017/2018’s harvest production. The Agbiz/IDC Agribusiness Confidence Index, released in March, shows that agricultural producers are still downbeat about business conditions. Add to this the fact that consumers are under financial strain due to increased fuel prices, higher electricity costs and more pressure on their bottom-line, and the question arises as to whether the local market can absorb the excess beef in production.
In the face of this, what does it mean for cattle farmers in the long term and how can they maintain their resolve?
Creating a thriving beef export industry
Exported beef comprises 4% of local beef production and supplies 42 countries globally. Frozen and fresh meat exports added a positive trade balance of R203m between 2012 and 2016. In addition, South Africa ranked 16th globally for top red meat exports, with the Ukraine in 15th position and Brazil in the number one position.
it is critical that our beef industry remains competitive and meets agricultural export opportunities if it is to remain competitive.
In line with this, it is encouraging that select Middle Eastern countries have now opened trade to South Africa because the government has reinstated veterinary certificates for beef with these countries, following the outbreak of FMD. This is good news for local beef producers as the re-established beef trade will maintain local beef prices.
However, while good progress has been made, more needs to be done to ensure that trade volumes from beef exports increase to the volumes seen before the FMD outbreak.
Recognising cattle farmers
It is everyone’s responsibility to ensure that the meat industry remains profitable, a stable source of revenue and employment, and stimulates the growth of commercial and emerging farmers, as it greatly contributes to the economy.
The recent SA Feedlot Association Cattleman’s Conference showed that cattle production was ramping up to meet the food demands of a growing global population. Beef production was highlighted as a critical component to meeting anticipated food demand by 2050.
To highlight the important work that cattle farmers are doing in the country, the Beefmaster Group of Companies has joined forces with the prominent agricultural radio station Landbou Radio to launch a new initiative, #CattleFarmeroftheMonth. The initiative aims to recognise established and emerging cattle farmers by profiling one cattle farmer every month on our Facebook platform and on air. We hope that by recognising the work that cattle farmers do, we create more opportunity and contribute to the development and upliftment of the beef industry.
A resilient industry
Cattle farmers are incredibly resilient; they have often faced uncertain economic circumstances and unforeseen pressures yet have managed to maintain a sustainable beef industry. However, the industry is strongest when farmers and beef producers combine their efforts. There are feasible ways for cattle farmers to hedge against such tough times. Forming the right partnerships with players who recognise and understand the landscape for farmers, will encourage the long-term sustainability of cattle farmers’ business. It is also critical that cattle farmers incorporate mitigating strategies to hedge against pricing and economic pressures, which will ensure their competitiveness.
About the Beefmaster Group of Companies
Beefmaster Pty (Ltd) is a leading specialist producer of quality beef products supplying South Africa, the Middle- and Far East, and beyond. We believe that all cattle breeds have the potential to deliver exceptional beef products. We forge strong relationships with established and emerging farmers to access a variety of cattle, regardless of breed, helping farmers boost the quality and sustainability of their herds by offering training, mentorship programmes and offtake agreements.
Our state-of-the-art technology and world-class facilities allow us to customise and “produce to order” for some of the biggest players in the food industry. Our exceptional team of highly-trained staff, operating in line with the highest possible safety standards, enables us to be a trusted supplier and partner. We commit resources to our staff and to local communities, with a view to sustainably and positively impacting the environment in which we do business.
With a successful track record spanning more than three decades, Beefmaster is still the partner to trust. – Roelie van Reenen, Beefmaster Group of Companies