Meatco faces losses after feedlot closure

MEATCO yesterday said the closure of its Okapuka Feedlot will cause huge financial and job losses.

The Okapuka feedlot near Okahandja was closed by the veterinary services department on 2 September because of zeranol detected in urine samples on cattle taken on 4 April. This was the second time that zeranol was detected at the feedlot within 12 months.

Meatco said in a statement yesterday that it did not administer zeranol, and that hormones such as zeranol are naturally occurring substances.

The company will incur losses estimated at between N$700 million and N$800 million, of which 70% will be in foreign currency. Meatco also expects that half of its workforce is at risk of losing their jobs.

The company said they spend just over N$9 million per month on the feedlot, which on average sells cattle to the value of just over N$15 million. “With an assumed length of feedlot closure lasting for months and an impact of N$17 million per month, the total impact is estimated to be N$143 million,” the company stressed.

At current slaughter volumes, Meatco would be forced to drop current beef prices by roughly N$ 7,15 per kg to compensate for these losses, the statement said.

Meatco said the closure of Okapuka would result in the loss of 300 jobs. The feedlot has been identified by Meatco and the industry as one of the means to address the vast numbers of weaners (180 000 per annum) leaving the country on-the-hoof to South Africa.

The company has spent about N$50 million to upgrade the Okapuka feedlot during the past few years to accommodate up to 9 500 cattle.

Furthermore, N$100 million is earmarked for establishing feedlots at Annasruh, Gobabis, and Buschbrunnen, Kombat, with a standing capacity of 12 000 cattle each.

“With already declining cattle numbers due to the drought, the risk of losing lucrative clients overseas due to an inconsistent supply and quality of meat is increasing,” the company said. The Okapuka feedlot intended to slaughter 32 000 animals during the 2016/17 financial year.

Meatco said this target has already been decreased by 7 000 animals due to trade restrictions imposed on the Okapuka feedlot.

It now faces the risk of not being able to fulfil the additionally allocated 400 tonnes for the Norway quota for this financial year.

In a document released yesterday, the veterinary department said from 22 cattle which were sampled in April, two bulls tested positive for zeranol.

“Legal charges may be initiated against those responsible for the care of animals,” the department said.

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