The Effect of an Increased Price and Rain in the NCAs

The three factors that play an important role in the success of Meatco’s abattoirs are the quality of the cattle received, the number of cattle received and the available markets for products.

When these three factors are aligned, the abattoirs will be successful, says Neu-Nique Williams, Corporate Communications Officer of Meatco. Thanks to the increased Meatco producer price, Meatco pays the same price to producers north and south of the Veterinary Cordon Fence (VCF). Although this is good news for producers, Meatco’s operations in the Northern Communal Areas (NCAs) will continue to struggle because the NCAs abattoirs don’t have European Union (EU) status and as such, products from this area cannot enter high value markets. The increased price means good prices for producers but not necessarily good returns for Meatco.

According to Cyprianus Khaiseb, Meatco’s executive for the NCAs, the company will slaughter more cattle in the area but will not necessarily receive the desired quality. Also, while the same price is paid for animals in the NCAs, the markets where these products go are not high value markets. Products from the NCAs are only marketed in Africa and not overseas where returns are much higher. So while we pay a higher price for the same animal, the market where the meat goes still pays the same.

If the NCAs manages to align the above-mentioned three factors, there definitely be a success story to tell.

When it comes to rain in the NCAs, things don’t look very promising yet. While the Zambezi region received fairly good rains, the eastern area of the Kunene Region hasn’t received much at all. Between 60% and 70% of the cattle in the NCA come from the Kunene Region and therefore we cannot make predictions at this stage, possibly only towards the end of March.

To make matters worse, grass is going to take much longer to grow as a result of last year’s drought, and the NCAs is already overgrazed as it is. Therefore we can’t foresee that the quality of animals is going to change drastically, but we hope to see an improvement in terms of quality from April 2014.

In the NCAs, 70% of the animals received are grades 0 and 1 and 70% are C-grades.

Source : New Era