Growing demand, rising meat prices and production costs as well as a scarcity of land require further efficiency gains in beef and mutton production if production levels are to be maintained or even increased. This was the conclusion drawn from the tenth agri benchmark Beef and Sheep Conference held in South Africa in late June 2012.
The agri benchmark was attended by 120 decision-makers from politics, business, research and NGOs (see Box at end of article on agri benchmark). This year's discussions centred on increasing price fluctuations for animal feed and other input. Dr. Michael Welling of the Heinrich von Thünen Institute, Brunswick/Germany gives a summary of the most significant outcomes, from which Rural21 presents the following excerpts.
Asia and Africa will be leading global population growth over the next 35 years. Population growth and rising per-capita income are set to result in a further increase in the demand for meat. In the Maghreb states of Morocco, Tunisia and Algeria, overgrazing, informal markets and their impact on meat quality and safety represent considerable challenges. On the other hand, the cost structure of the small enterprises provides a relatively high level of flexibility to adapt to price fluctuations for inputs. Striking a balance between sustainable livestock numbers, individual animal performance and income requirements is the key to growth in these enterprises. Given the proximity of wild animals to livestock in Southern Africa, coping with problems regarding foot-and-mouth disease among others, will be an uphill task. As a result, this worsens the prospects of developing an export-oriented meat industry.
Beef - production and markets
Asia and Russia are the leading importers of beef. At the same time, Russia, Ukraine and Kazakhstan have launched support programmes to boost the production of beef and other products (e.g. milk). Large-scale enterprises and holdings are among the profiteers of this policy. The European Union is reckoning with stable to slightly falling production, with the implementation of agricultural reform in 2014 and the ending of milk quota in 2015 representing uncertainty factors.
In some countries, expanding land used for farming is a medium- to long-term option to raise meat production, although it is conditional on political stability, investment and sufficiently high prices to justify such a measure. Furthermore, the question remains whether new land would actually be used for cattle fattening. Closing the productivity gap between countries and between the producers within a country is therefore the most important approach in enhancing productivity. The potentials are especially high where levels to start out from are low, such as in small enterprises in developing countries and emerging economies, but also in larger enterprises in Brazil and Argentina. In the countries in which calves are becoming rare (e.g. in South Africa), raising the number of calves is the prime objective.
The agri-benchmark experts see two main ways to raise productivity: improving pasture productivity and management, and final fattening with energy-rich rations during the last 90-150 days instead of final fattening in the pasture. It can be reckoned with that short- to long-term market signals will result in rises in productivity. However, these may also lead to undesirable side-effects such as overgrazing, water pollution and problems with the animals’ wellbeing.
Training and further training, field extension services and backup for producers are the key to sustainability in such developments. However, all this must be integrated in a strategy that has ideally been prepared by all relevant groups in the value added chain. Policy measures regarding land purchase and management can promote or impede such developments.
Lamb and mutton production and markets
A workshop titled “The return of sheep-farming” attempted to answer the question whether the latest price increases for lamb and mutton would result in more sheep-farming. The answer is a careful and qualified “yes”. Demand in Asia and the Middle East is creating favourable sales conditions for profitable sheep production. The potential is seen mainly in developing countries and emerging economies as well as in Australia, where sheep-farming has already expanded at the cost of cattle farming in some regions.
In the developing countries and emerging economies, problems such as overgrazing, steppe formation, productivity and meat quality need to be addressed. Since these countries can set out from a low level, enhancing productivity appears to be attainable with a relatively small effort provided that price conditions are agreeable. In some cases, structural changes in the value added chain are needed, too, in order to lower unrealistically high consumer-producer price relations. With its increase by 78 percent of weight produced per ewe over the last 20 years, New Zealand is an example of productivity increases that have been offset by the smaller stocks of sheep.
At the public final event of the conference in Pretoria, participants stressed the significance of sustainability, the establishment of a suitable framework by politics (instead of permanent subsidies), the influence of domestic demand in Brazil on price levels and exports, the special characteristics of markets in emerging economies and the old but all the more true statement that ultimately, it is the consumer who determines where meat production is headed.
Agri benchmark – understanding agriculture worldwide Agri benchmark is a global, non-profit network of agricultural economists, advisors, producers and specialists in key sectors of agricultural and horticultural value chains. We use internationally standardised methods to analyse farms, production systems and their profitability.
