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Cattle marketing to spur agriculture growth

November 23, 2022

Increased livestock marketing activities experienced this year are expected to support growth in the agriculture industry, research firm Simonis Storm has said. 

This was after cattle marketing activity increased by 4.4%, in the 10 months to October this year whereas sheep marketing increased 43% YTD compared to the same period last year. 

Despite this, local livestock slaughtering remains on a downward trend, cattle slaughtering decreased by 28.1% y/y, sheep was down 4.1% y/y and goats down 20.3% y/y in October 2022. 

"Only pig slaughtering recorded an expansion, rising 7.6% y/y in October 2022. Live exports are still significantly higher compared to exports a year ago. Cattle exports increased by 23.1% y/y, sheep (↓ 3.6%) and goats (↑ 50.1% y/y) in October 2022. South Africa and Botswana were the sole export destination for mutton and pig products respectively, whereas most beef product exports went to the EU (71.4%), South Africa (12.8%), China (12.4%) and Norway (3.2%) following a lift of export bans in 3Q2022," Simonis storm reveals in its monthly agricultural report. 

The report further noted that Namibian export abattoirs reduced the sheep A2 carcass price differential against the Northern Cape abattoirs to only 27 cents during October 2022, from the N$6.18/kg differential observed in October 2021. 

“The pork ceiling price also increased by 18.4% due to an increase in the South African reference price as well as the effect of the revised formula of the pork ceiling price” according to the Meatboard. 

Meanwhile, auction prices have largely remained on a slight upward trend since the start of the year. YTD, goat auction prices increased by 6.7%, lamb (↑ 3.0%) and the pork ceiling price increased by 17.8%. 

"Cattle (tollies) auction prices were the only category that recorded price declines, where auction prices decreased by 3.3%. Weaner prices exceeded cattle prices for some time as South Africans paid higher prices during restocking times and as farmers expanded herds following the drought period.  However, this trend has reversed since mid-2022," the report states. 

Average farmgate prices for various horticulture products have decreased by 4.6% on an annual basis in September 2022 according to the latest data available from the Namibian Agronomic Board (NAB). 

At the same time, average retail prices have increased by 25.0% and the firm notes that this is a clear indication of an increase in business costs as fuel (i.e. diesel), plastic, packaging and other materials have seen significant price increases in recent months.

"On average, retailers charge 2.7 times more than what farmers charge, with the largest retailer premium being recorded on butternut (4.9 times), green peppers (4.8 times) and sweet potatoes (3.3 times). We believe that an abuse of market power by wholesalers can also partly explain the big price differences between farmgate and retail prices as indicated by some farmers we have spoken to," said Simonis Storm

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Last modified on Wednesday, 23 November 2022 17:49