Livestock marketing and exports has made a comeback in activity in March 2023, improving by 38% y/y across cattle, sheep and goats, the latest Agriculture sector report by research firm, Simonis Storm reveals.
In the prior month, marketing activity grew by 19% y/y. On a monthly basis, livestock marketing increased by 75%.
The largest driver was sheep marketing (up 53% y/y), followed by cattle marketing (up 16% y/y) but was weighed down by goat marketing (up 13% y/y). Although cattle (up 7% q/q) and goats (up 57% q/q) have weighed on the growth in 1Q2023 compared to 4Q2022, total livestock marketing recorded a significant improvement of 15% q/q, which is only due to the growth in sheep marketing (up 60% q/q).
Slaughtering of livestock is also on an upward trend since October 2022. The number of livestock slaughtered – growing by 9% in 1Q2023, was due to sheep slaughtering improving (up 44% q/q), whereas the number of cattle (down 33% q/q), goats (down 68% q/q) and pigs (down 7% q/q) slaughtered declined.
The number of sheep exported increased from 70 710 heads in 4Q2022 to 118 853 heads in 1Q2023, which is reflective of a 68% q/q growth. The total livestock slaughtered grew by 11% q/q in 1Q2023, where cattle (down 16% q/q) and goats (down 56% q/q) remained on a downward trend.
“The growth in marketing (i.e. slaughtering and exports) among sheep and cattle is due to farmers urgently attempting to sell off livestock in preparation for the predicted upcoming drought. Indeed, MeatCo recently reported that they are operating at full capacity with April and May 2023 already fully booked for slaughter, whereas June and July 2023 are filling up. Mostly sheep (21,080 heads) were slaughtered in March 2023, which posed a 51% m/m increase, while cattle (9,594 heads), goats (135 heads) and pigs (2,638) changed by +47% m/m, -6% m/m and -1% m/m, respectively,” the report notes adding that prices for live animals at auctions – with the exception of pork – are on a decreasing trend due to ongoing loadshedding in South Africa that is lowering demand, as farmers, retailers and households face higher storage costs (i.e. fridges/freezers).
The prices for weaners decreased by 35% in the last 12 months and was priced at N$25.81/kg in March 2023. Similarly, tollies cattle (down 22.3%), goat lamb (down 7.9%) and sheep lamb dorper (down 3.8%) prices also declined in the last 12 months.
“Ongoing pork shortages as the result of the foot and mouth disease outbreak in South Africa are still supporting local pork prices, rising by 48.9% y/y in March 2023.”
The report also affirmed that the agricultural sector continues its lackluster performance despite all sub-sectors of the industry expanding in output in 2022. During 2022, livestock farming increased by 1.2% y/y, fishing (up 2.3% y/y) and crop farming (up 4.3%) in 2022, leading to an overall growth of 2.6% in the agricultural industry .
“The agricultural industry is a crucial component of any economy, especially in Namibia, as the industry has one the highest potentials to absorb the abundant unskilled labour in the country and improve on socioeconomic indicators such as poverty and unemployment. The problem however is that Namibia’s biggest unemployment issue is the youth and based on certain surveys, the youth are not keen on living in rural areas and focusing their efforts on agricultural activities.
“To this end, we have seen the urban population of Namibia increasing from 28% in 1990 to 53% in 2020 according to World Bank data. This implies that agricultural activities – that are typically in rural areas – have a smaller worker sample to attract workers from and this could always be a risk to future production,” the report notes.
It further says that in this scenario, local farmers will have to increase investments in automation in order to deal with a labour shortage if we continue to observe a rural – urban migration and if the youth continue to prefer white collar professions.
“At the same time, some farmers we engaged with are keen to exit the market altogether as they lack market power to influence the price of the harvest. In recent years, we have seen an increase in apps, websites and physical informal stalls being created to sell directly to the market and avoid wholesalers. While there is no evidence of farm closures, this remains a risk to long-term food production in the country,” extended the report.