By Jasper Raats and Nico von Burick
Since the beginning of March, more than 2 000 cattle have been on total clearance sales, as commercial cattle farmers in Limpopo are giving up because they cannot farm profitably.
Are any brakes left on the steep downhill road that red meat farmers find themselves on? The crisis in Limpopo comes in a year when the province has more than enough grazing, said Lukas Eksteen of Bufland Farming at the recent congress of the Red Meat Producers Organisation (RPO) in Polokwane.
He stated that the farmers in this province are receiving the short end of the stick with weaner calf prices and cannot compete with farmers in neighbouring countries, particularly Botswana. Limpopo’s red meat industry has been struggling for nearly four years against the effects of foot-and-mouth disease, which emerged in the province in 2019. However, the province has had no active foot-and-mouth disease cases in the past year and has experienced no new outbreaks.
Yet farmers still earn R2 to R2.50 less per kilogram for their feeder calves than farmers in the rest of South Africa (where there were outbreaks) because Limpopo is considered a foot-and-mouth disease province, said Eksteen.
“While we have to sell our calves for less than the national average price, trucks full of feeder calves cross the border from Botswana.” He said Limpopo’s farmers understand that trade relations with neighbouring countries must be protected. “But can we please get a level playing field?”
‘Local demand a problem’
An independent agricultural economist, Prof. Johan Willemse, says local red meat prices have not increased for farmers in recent years. The reason is that the economy is getting increasingly weaker.
“There is simply not a strong enough consumer demand to buy the meat we produce at profitable prices. Prices are flat, and the economy is stagnating. This is the basic dilemma. Livestock farmers, including sheep farmers in the Karoo, are under widespread pressure and have had to reduce their herds significantly. That’s the story. We produce too much meat for a declining economy and people who are becoming poorer.”
He says Namibia’s or Botswana’s supply is not the problem—it’s local demand.
“These countries have been part of South Africa’s regular weaner calf supply for 30-40 years. They also had drought years in the past few years, and their supply was less than in previous years.”
Rethink the product
Prof. Cobus Oberholster, a professor at the University of the Free State’s School of Management who studies a sustainable livestock industry, says the local red meat industry has been on a downward trend for three years. However, he notes that there is a global demand for red meat.
There is demand in the East and Middle East, but we compete with Australia and other countries like Brazil and Argentina. However, all stakeholders must do everything possible to maintain markets abroad and seek new opportunities overseas.
He mentions that many local farmers overlook that livestock in farming is a liquid asset which can be sold at any time if someone faces financial trouble.
“You can always sell a load of cattle, even at a lower price, if you’re in a pinch. To an extent, it’s an insurance policy, and a farmer should never remove that advantage from his farming operation if he can help it.”
Oberholster says a cow consists of many cuts. There are high-value products for one market and other cuts for different markets. The industry must do everything possible to promote red meat consumption.
“Perhaps high-value cuts should be exported, and the sales of other cuts encouraged locally.”
This means a comprehensive campaign should also be launched to popularise low-value cuts.
“People should forget how much a chop costs in the supermarket. It’s only 2 kg of the carcass. The other cuts, such as the forequarter and offal, must also be made popular.”
‘Add value’
Casper Schmidt, chief manager of livestock and properties at BKB, says his short answer is that livestock farmers should try to add value.
“Farmers tend to sell their animals to anyone with a truck. The feedlots and abattoirs also buy from the truck. We must try to add value and deliver a product for which the abattoir will pay a premium price.”
Regarding prices, he says that a few months ago, it was difficult for farmers to make a profit, but in the first few months of this year, prices have improved.
“I know the economic conditions are poor, but everything is cyclical. I believe everyone will reach the top of the wave again and earn good money.”
According to the RPO’s market report, weaner calf prices at the beginning of April were R37.15/kg, 21.8% higher than last year’s corresponding period. Store lamb prices were R42.56/kg, representing a 15.9% increase. An A2 beef carcass cost 16.4% more in the first week of April than in 2024.
Solution: from mielie to steak on one farm
Arné Grobbelaar, an eMvelo (Amsterdam) livestock farmer in Mpumalanga, hedges against the volatility of weaner calf and maize prices by owning and managing the entire value chain. He slaughters 600 to 700 cattle yearly on his farm, Glen Aggy Simbras, where a butchery and abattoir are integral parts of his farming operation.
On 200 hectares, Arné produces more maize than his cattle can eat, and he makes silage and hay and plants winter grains. He sells the surplus grain that he doesn’t feed to his cattle. His feed costs are thus just his input costs on the grain, and then the grain he sells even subsidises these costs.
Arné admits that not everyone has the climate, soil, and water to maintain the entire red meat production chain and value chain under one roof, but says many of his friends and colleagues achieve similar results to his by working together in cooperative structures.
Some will feed calves together that they breed and then take them to another partner with a slaughterhouse, even if they must drive past one town with their cattle to deliver them to that partner. Then, they market it with another partner with a butchery or other outlet. This way, you add value to your calf instead of just being satisfied with, for example, R32 per kilogram.
Even if you take your calf one step further in the value chain, you add that value and receive a larger share of the consumer’s rands.
His primary buyers are local middle-class housewives and poorer income groups from the area, farm workers, and informal workers. So, some cuts sell well at good prices and affordable cuts are bought by the very poorest.
“Because we sell from the farm, a large part of the local community comes on slaughter days, for example, and buys offal, heads, and feet. It flies out the door. Our high-value cuts are then sold to consumers at prices similar to what supermarkets charge for them.”
One significant advantage of marketing his carcasses is that Arné is not tied to a carcass price per kilogram. He can capitalise on the value he adds by cutting up the carcass and earning retail prices for his prime cuts, provided there is demand.
“Less popular cuts you sell for slightly cheaper —just supply and demand. Our clients must drive out of town to us, and we must keep that distance in mind to remain competitive. For example, we can’t ask the same price for mince as they do in town, because what incentive is there then for them to drive to us?”
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