Good prices for sheep at abattoirs, industry says

SHEEP and goats make up the largest percentage of the livestock population in Namibia – with a combined number of over four million – and their marketing potential is very high, a recent study found.

There are 2,66 million sheep and 2,04 million goats in the country, according to the Institute for Public Policy Research (IPPR). The Government strategy to impose a levy on live sheep exports in future and the regulation to have six sheep slaughtered locally for every sheep exported, might lead to farmers losing millions of dollars, the IPPR noted in its latest briefing paper published earlier this month.However, the Abattoir Association of Namibia (AAN) says this is not so.In a reaction published recently, the AAN said the local meat industry earns “over one billion Namibia dollars of revenue per annum for Namibia” and is considered a strategic industry.The aim is to increase the slaughtering throughput for local abattoirs instead of sending live animals to South Africa, said Diana Mueseler, spokesperson of the AAN.To stimulate local value addition, Government decided to embark on the small-livestock marketing scheme, which started in July 2004.Farmers wanting to export sheep on the hoof had to slaughter one animal locally for every sheep exported, Mueseler told The Namibian.This ratio was increased to 2:1 last year and since September 2006 it is 6:1, meaning that for every sheep exported to South African abattoirs, six sheep must be slaughtered in Namibia.Initially, Government wanted to impose a 15 per cent levy on live sheep exports, but this was dropped in favour of the export ratio.Local abattoirs and tanneries are expected to reach full capacity by November 2007, as per Cabinet decision.”The four local abattoirs slaughtering sheep can only be financially viable if they slaughter at full capacity, because 70 per cent of their operational costs are fixed costs,” Mueseler said.”Since the small-livestock marketing scheme was introduced, the abattoirs are running at an average of 66 per cent capacity.”The IPPR claimed that local abattoirs paid lower prices to sheep and goat producers than in South Africa.”This is definitely not the case,” the AAN spokesperson stated.”The Abattoir Association of Namibia strongly objects against the one-sided reporting and opinions as forthcoming from the IPPR Briefing Paper, ‘Adding Value with Mutton – Is Pricing Everything?’.The Abattoir Association of Namibia was never consulted in drafting this document,” it said in a statement.”The small-stock export abattoirs and small-stock producers agreed upon a Namibian Reference Price to be paid by Namibian abattoirs for sheep carcasses.To compensate for transport and weight loss differences to the South African abattoirs, the Red Meat Abattoir Association (RMAA) of South Africa average producer price, minus an agreed-upon amount in N$ per kilogramme (in respect of transport and weight loss), was accepted by the producers and abattoirs as the Namibian Reference Price.”Mueseler went on to explain that the Namibian small-stock producer on average pays N$0.62 per kilogramme more to transport livestock to South African abattoirs than to Namibian abattoirs.”Weight loss due to transport of livestock to South Africa is approximately 12 per cent per animal, whilst weight loss due to transport to Namibian abattoirs is approximately 6 per cent.This equates to a difference for a 35 kg live weight sheep of approximately one kilogramme.That equates to approximately N$1.75 per kilogramme carcass weight.The slaughtered weight is usually 16 kg.”Small-stock producers exporting live sheep to South Africa are thus N$2.37 per kilo worse off than those slaughtering inside Namibia.”Small-stock export abattoirs not only pay the Namibian small-stock producer a fair price, but in fact pay on average a better price for most of the grades than what Namibian producers would receive from abattoirs in South Africa,” Mueseler told The Namibian.Namibian small-stock producers received on average a 25 per cent increase in producer prices during 2006, being the highest increase ever, she added.”Export abattoirs in Namibia form a vital link in the value-adding chain in the Namibian meat industry and are major job creators in towns like Keetmanshoop, Aranos and Mariental, where they contribute largely to their revenue.””Propaganda and negative reporting against the small-stock export abattoirs are counterproductive and not in the best interest of value addition in Namibia.Abattoir owners have invested hundreds of millions of Namibian dollars to help build the Namibian economy and are being targeted as treating the small-stock producers unfairly,” Mueseler said.According to the IPPR, Namibia exported N$1,6 billion worth of livestock in 2005 – with cattle accounting for N$1,2 billion and small stock for N$406 million.The Government strategy to impose a levy on live sheep exports in future and the regulation to have six sheep slaughtered locally for every sheep exported, might lead to farmers losing millions of dollars, the IPPR noted in its latest briefing paper published earlier this month.However, the Abattoir Association of Namibia (AAN) says this is not so.In a reaction published recently, the AAN said the local meat industry earns “over one billion Namibia dollars of revenue per annum for Namibia” and is considered a strategic industry.The aim is to increase the slaughtering throughput for local abattoirs instead of sending live animals to South Africa, said Diana Mueseler, spokesperson of the AAN.To stimulate local value addition, Government decided to embark on the small-livestock marketing scheme, which started in July 2004.Farmers wanting to export sheep on the hoof had to slaughter one animal locally for every sheep exported, Mueseler told The Namibian.This ratio was increased to 2:1 last year and since September 2006 it is 6:1, meaning that for every sheep exported to South African abattoirs, six sheep must be slaughtered in Namibia.Initially, Government wanted to impose a 15 per cent levy on live sheep exports, but this was dropped in favour of the export ratio.Local abattoirs and tanneries are expected to reach full capacity by November 2007, as per Cabinet decision.”The four local abattoirs slaughtering sheep can only be financially viable if they slaughter at full capacity, because 70 per cent of their operational costs are fixed costs,” Mueseler said.”Since the small-livestock marketing scheme was introduced, the abattoirs are running at an average of 66 per cent capacity.”The IPPR claimed that local abattoirs paid lower prices to sheep and goat producers than in South Africa.”This is definitely not the case,” the AAN spokesperson stated.”The Abattoir Association of Namibia strongly objects against the one-sided reporting and opinions as forthcoming from the IPPR Briefing Paper, ‘Adding Value with Mutton – Is Pricing Everything?’.The Abattoir Association of Namibia was never consulted in drafting this document,” it said in a statement.”The small-stock export abattoirs and small-stock producers agreed upon a Namibian Reference Price to be paid by Namibian abattoirs for sheep carcasses.To compensate for transport and weight loss differences to the South African abattoirs, the Red Meat Abattoir Association (RMAA) of South Africa average producer price, minus an agreed-upon amount in N$ per kilogramme (in respect of transport and weight loss), was accepted by the producers and abattoirs as the Namibian Reference Price.”Mueseler went on to explain that the Namibian small-stock producer on average pays N$0.62 per kilogramme more to transport livestock to South African abattoirs than to Namibian abattoirs.”Weight loss due to transport of livestock to South Africa is approximately 12 per cent per animal, whilst weight loss due to transport to Namibian abattoirs is approximately 6 per cent.This equates to a difference for a 35 kg live weight sheep of approximately one kilogramme.That equates to approximately N$1.75 per kilogramme carcass weight.The slaughtered weight is usually 16 kg.”Small-stock producers exporting live sheep to South Africa are thu
s N$2.37 per kilo worse off than those slaughtering inside Namibia. “Small-stock export abattoirs not only pay the Namibian small-stock producer a fair price, but in fact pay on average a better price for most of the grades than what Namibian producers would receive from abattoirs in South Africa,” Mueseler told The Namibian.Namibian small-stock producers received on average a 25 per cent increase in producer prices during 2006, being the highest increase ever, she added.”Export abattoirs in Namibia form a vital link in the value-adding chain in the Namibian meat industry and are major job creators in towns like Keetmanshoop, Aranos and Mariental, where they contribute largely to their revenue.””Propaganda and negative reporting against the small-stock export abattoirs are counterproductive and not in the best interest of value addition in Namibia.Abattoir owners have invested hundreds of millions of Namibian dollars to help build the Namibian economy and are being targeted as treating the small-stock producers unfairly,” Mueseler said.According to the IPPR, Namibia exported N$1,6 billion worth of livestock in 2005 – with cattle accounting for N$1,2 billion and small stock for N$406 million.