9.2.1 SOUTH AFRICAN FEEDLOT ASSOCIATION
The South African feedlot industry came to life in the 1960’s. Cattle farmers from the grain producing districts were basically forced by the drought and poor grain prices to start feeding their cattle on inferior quality grain and hay. All facilities in those initial years were privately owned, quite primitive and the feeding methods were unreliable with no positive progressing results.
Technology and feed experts were obtained from the United States to assist with means of feeding beef on grain and hay products. The first feedlot experiments that was done by private farmers in South Africa provoked resistance and social argument against feedlots from certain statutory bodies and business opponents. These arguments were based on the basis that the feeding of grain intended for human consumption, was regarded as being unethical to be fed to animals.
This led to feedlot producers coming together to establish and register the South African Feedlot Association in the early 1970’s, to look after their interests. Initially the Association experienced some financial and statutory problems, but today it is a well-established organisation representing 96% of all cattle feeders, with its Head Office in Pretoria. The South African feedlot industry is a flourishing industry that produces approximately 75 % of all beef produced in South Africa – which in real terms is in the region of 1,35 million head per annum with a one-time standing total of + 420 000 head on feed.
9.2.2 SOUTH AFRICAN GRAINFED BEEF
To protect the brand and trademark of its members, the SA Feedlot Association registered the SA Grainfed Beef trademark, for the sole use of its members in South Africa and neighbouring countries. Under this trade, lean, tender young beef is selected according to strict A-Grade specifications of the South African Meat Classification System, with evenly spread fat coverage all over the carcass to ensure an ultimate taste and eating experience.
9.2.3 BEEF FEEDLOTS IN SOUTH AFRICA
The Sernick Feedlot was constructed in 1996 – initially for 1500 cattle but has since been extended to 12 500 cattle.
Weaners are mainly bought from outside and are backgrounded on the farm for a period of approximately 30-60 days before they enter the feedlot for a period of 110-120 days and are slaughtered at a live weight of approximately 450 kilograms.
The average growth obtained in the feedlot is 1.98 kilograms per day. The feedlot presently supplies only 25% of the daily slaughter at the abattoir. Water has always been a restricting element, but a large earth dam was constructed in 2014 that provides enough water for at least 10 000 animals. The feedlot supplies up to 40% of the daily slaughter.
Custom feeding is accommodated and a number of customers who buy their bulls from Sernick are custom fed at the Sernick Feedlot. Sernick also custom feeds for a number of emerging farmers as part of its Corporate Social Investment Programme and support to these farmers. Apart from excellent management processes and systems, other key elements are the feed mixing and processing facilities that are considered to be a very high standard. All the manure from the feedlot is used on the cultivated pastures.
SERNICK BONSMARA STUD
The Sernick Group is a diversified organisation with its focus on agriculture and agricultural processing activities, including a Bonsmara stud, feedlot and animal feed production, red meat production (abattoir, de-boning and processing) as well as retail outlets. Sernick is based in Kroonstad in the Free State province of South Africa and consists of six business entities, each adding value to the group. The group employs 400 people with annual revenues of R 1 billion.
The bull test station has a capacity to test 200 bulls at any one time and with three cycles per year, it has the capacity to test 600 bulls per year.
Since 1990, over 9000 bulls have been tested including over 3000 own bulls. During this period the FCR (feed conversion ration) of the Sernick bulls has been improved by 1.2 kilogram per kilogram weight gain while the ADG (average daily gain) has improved by 200 gram per day. At the same time, the height has been reduced (smaller animals) and the length has been increased. At current feed and meat prices, these figures represent a difference of almost R1200 per animal in the feedlot which is significant, and which illustrates the importance of FCR and hence Phase C testing (the performance phase where feed intake is measured on individual animals to evaluate feed conversion).
SERNICK FEED FACTORY
The Feed Factory was constructed in 1997 mainly to provide feed to the bull testing station. Since then it has been extended to a capacity of 7000 tons per month, of which approximately 35% is used to supply feed to the Feedlot and the Farm. The balance of 4500 tons is sold to customers within a radius of approximately 250 kms.
A total of 115 different mixes are produced and include dairy feed, cattle feed, licks, pig feed, sheep feed, game pellets, broilers and hatchers.
Sernick’s own transport fleet is used for all deliveries, while outside transport is used to bring in all raw materials.
Sernick Veevoere produces over 115 feed formulations and delivers throughout the Free State and nearby provinces.
Roughage is produced on the farm but all other raw materials including maize is procured from suppliers. Maize is sourced from grain producing farmers within a radius of 50 kilometres from the feed factory.
Approximately 50% of maize consumption of 30000 tons per year is stored on the farm in maize bunkers.
COUNTRY MEAT ABATTOIR
The abattoir at Kroonstad was purchased in 1998 and has since been upgraded to slaughter up to 250 – 270 cattle per day (average 200 cattle). Approximately 40% of the cattle come from Sernick’s feedlot while the balance is purchased from farmers and other feedlots.
RETAIL THROUGH THE COUNTRY MEAT BUTCHERIES
During 2011, two existing butcheries in Kroonstad were acquired and upgraded to serve two different income groups.
Another outlet was opened in Fourways, Gauteng in January 2013.
Sernick’s aim is to retail approximately 50% of the monthly slaughter within the next five years. To achieve this, at least two butcheries per year will have to be opened.
At Sernick Group the customer can:
- Buy top Bonsmara genetics
- Test stud bulls for average daily gain and feed conversion
- Custom feed weaned calves
- Sell weaned calves
- Sell slaughter-ready cattle
- Buy a range of top animal feeds
- Buy top quality meat and deli products at the retail outlets.
BEEFMASTER
Beefmaster Feedlot is situated on the farm Kromellenboog, near Christiana, North West Province. There are two feedlots: one for cattle and the other for lamb.
Beefmaster entered the retail market in 2005 with retail shop outlets at Olifantsfontein (Gauteng), Soweto (Gauteng), and Kimberley (Northern Cape).
KARAN BEEF
Karan Beef Feedlot is situated in Heidelberg, Gauteng. Karan Beef is also the owner of Karan Beef Abattoir, situated in Balfour, Mpumalanga Province. Distribution of meat is done via the City Deep Distribution Centre, Johannesburg. Karan also has its own Feed Mill, with a capacity of 1500 tons of mixed feed per day.
THE LHC GROUP
LHC Feedlot is situated at Sasolburg, Free State, and feeds 6500 head of cattle. The LHC Feedlot is supported by the LHC Group of companies in the line of grain production, storing facilities, wool shearing, and transportation.
ZZ2 LIVESTOCK
ZZ2 Livestock is part of an integrated farming system, based in the Mooketsi Valley in the Limpopo Province. ZZ2 is the largest producer of tomatoes in the southern hemisphere, and also produces avocados, onions, apples and stonefruit. The business also specialises in commercial cattle, managing four Pinzgauer studs, two PinZ2yl studs, a Santa Gertrudis Stud and a Nguni stud.
FORTRESS CATTLE FEEDLOT
The farm Fortress is situated 12 km North-west of Frankfort, Free State Province. The feedlot feeds 6000 weaners per annum, mostly Bonsmara or Bonsmaracrosses. The farm produces the major portion of grain, and weaners are purchased from regular Fortress livestock producing clients.
9.2.4 FEEDLOT AUTHORITIES AND LEGISLATION
PURPOSE OF LEGISLATION
Legislation or Acts provide the set of rules whereby the government manages and controls all aspects of an industry, in this case, the feedlot industry. Legislation guides and protects the workplace, employees, consumers and all other parties, such as suppliers, local government, and the broader public against violation in terms of Occupational Health and Safety, Basic Conditions of Employment, Labour Relations, the Environment, Training, and also animal rights.
ACTS AND LEGISLATION
In the feedlot environment, the following legislation is applicable:
A. THE NATIONAL ENVIRONMENTAL MANAGEMENT ACT NO. 107 OF 1998
The NEMA is primarily an enabling Act in that it provides for the development of environmental implementation plans and environmental management plans. The principles listed in the act serve as a general framework within which environmental management and implementation plans must be formulated.
B. THE ENVIRONMENTAL IMPACT ASSESSMENT REGULATIONS IN
TERMS OF CHAPTER 5 OF THE NATIONAL ENVIRONMENTAL
MANAGEMENT ACT, 1998 (ACT NO 107 OF 1998)
The purpose of this act and process is to determine the possible negative and positive impacts of the proposed development on the surrounding environment and to provide measures for the mitigation of negative impacts and to maximise positive impacts.
C. NATIONAL WATER ACT, 1998 (ACT NO. 36 OF 1998)
The purpose of this Act is to ensure that the nation’s water resources are protected, used, developed, conserved, managed and controlled in ways that take into account, among other factors, the following:
- Meeting the basic human needs of present and future generations
- Promoting equitable access to water
- Promoting the efficient, sustainable and beneficial use of water in the public interest
- Reducing and preventing pollution and degradation of water resources
- Facilitating social and economic development
- Providing for the growing demand for water use
In terms of the section 21 of the National Water Act, the developer must obtain water use licences for the following activities:
- Taking water from a water resource
- Storing water
- Impeding or diverting the flow of water in a water course
- Engaging in a stream flow reduction activity contemplated in section
36;
- Engaging in a controlled activity identified as such in section 37(1) or declared under section 38(1)
- Discharging waste or water containing waste into a water resource through a pipeline, canal, sewer, sea outfall or other conduit
- Disposing of waste in a manner which may detrimentally impact on a water resource
- Disposing in any manner which contains waste from or which has been heated in any industrial or power generation process
- Altering the bed, banks, course or disposing of water found underground if it is necessary for the safety of people
- Removing, discharging, or disposing of water found underground if it is necessary for the efficient continuation of an activity or for the safety of people; and
- Using water for recreational purposes
D. NATIONAL ENVIRONMENTAL MANAGEMENT: AIR QUALITY ACT, 2004 (ACT 39 OF 2004)
The NEMA: AQA serves to repeal the Atmospheric Pollution Prevention Act (45 of 1965) and various other laws dealing with air pollution and it provides a more comprehensive framework within which the critical question of air quality can be addressed.
The purpose of the Act is to set norms and standards that relate to:
- Institutional frameworks, roles and responsibilities
- Air quality management planning
- Air quality monitoring and information management
- Air quality management measures
- General compliance and enforcement
Amongst other things, it is intended that the setting of norms and standards will achieve the following:
- The protection, restoration and enhancement of air quality in South Africa
- Increased public participation in the protection of air quality and improved public access to relevant and meaningful information about air quality
- The reduction of risks to human health and the prevention of the degradation of air quality
The Act describes various regulatory tools that should be developed to ensure the implementation and enforcement of air quality management plans. These include:
- Priority Areas, which are air pollution ‘hot spots’
- Listed Activities, which are ‘problem’ processes that require an Atmospheric Emission Licence
- Controlled Emitters, which includes the setting of emission standards for ‘classes’ of emitters, such as motor vehicles, incinerators, etc.
- Control of Noise
- Control of Odour
E. NATIONAL HERITAGE RESOURCES ACT, 1999 (ACT NO. 45 OF 1965 (NHRA)
The National Heritage Resources Act legislates the necessity and heritage impact assessment in areas earmarked for development, which exceed 0.5ha. The Act makes provision for the potential destruction to existing sites, pending an archaeologist’s recommendations through permitting procedures. Permits are administered by the South African Heritage Resources Agency (SAHRA).
F. NATIONAL ENVIRONMENTAL MANAGEMENT PROTECTED AREAS ACT, 2003 (ACT NO. 57 OF 2003)
The purpose of this Act is to provide for the protection, conservation and management of ecologically viable areas representative of South Africa’s biological biodiversity and its natural landscapes.
G. NATIONAL ENVIRONMENTAL MANAGEMENT: BIODIVERSITY ACT, 2004 (ACT 10 OF 2004)
The Biodiversity Act provides for the management and protection of the country’s biodiversity within the framework established by NEMA. It provides for the protection of species and ecosystems in need of protection, sustainable use of indigenous biological resources, equity and bioprospecting, and the establishment of a regulatory body on biodiversity
Objectives of the Act:
- With the framework of the National Environmental Management Act, to provide for:
- The management and conservation of biological diversity within the
Republic and of the components of such biological diversity
- The use of indigenous biological resources in a sustainable manner; and
- The fair and equitable sharing among stakeholders of benefits arising from bio-prospecting involving indigenous biological resources;
- To give effect to ratified international agreements relating to biodiversity which are binding on the Republic;
- To provide for co-operative governance in biodiversity management and conservation; and;
- To provide for a South African National Biodiversity Institute to assist in achieving the objectives of this Act.
H. PROVINCIAL LEGISLATION, E.G. GDARD AGRICULTURAL HUB POLICY
GDARD identified 7 Agricultural Hubs in Gauteng province. These hubs are earmarked for agricultural activities and there are policies and guidelines that should be taken into consideration when one plans to develop in these hubs areas. Urban development is usually not supported in these hubs.
I. NATIONAL ENVIRONMENTAL MANAGEMENT: WASTE ACT (ACT 59 OF 2009)
This Act came into effect on 11 June 2009. It aims to consolidate waste management in South Africa, and contains several commendable provisions, including:
- The establishment of a national waste management strategy, and national and provincial norms and standards, for amongst other, the classification of waste, waste service delivery, and tariffs for such waste services;
- Addressing reduction, reuse, recycling and recovery of waste;
- The requirements for industry and local government to prepare integrated waste management plans;
- The establishment of control over contaminated land;
- Identifying waste management activities that require a license, which currently includes facilities for the storage, transfer, recycling, recovery, treatment and disposal of waste on land; Co-operative governance in issuing licenses for waste management facilities, by means of which a licensing authority can issue an integrated or consolidated license jointly with other organs of state that has legislative control over the activity; and
- The establishment of a national waste information system.
9.2.5 AGENTS, SELLERS AND FINANCERS
LIVESTOCK AGENTS
Livestock agents are employed either directly by a feedlot business, by a livestock auctioneering company or by an abattoir, to act as an agent of the company in seeking and buying live animals. Livestock can be purchased directly from the farmer as primary producer, or via a livestock auction. The agent thus facilitates transactions between sellers and buyers on a professional basis.
SELLERS
Sellers can be primary producers, or secondary producers such as feedlots and livestock speculators.
FINANCERS
Short term finance for the buying of livestock is mostly organised through commercial banks, or livestock agencies and auctioneering agencies directly.
Prominent buyers and sellers of livestock:
LIVESTOCK AUCTIONEERS
The most prominent livestock auctioneers and agencies in South Africa are the following:
- Karoo Ochse Vleissentraal Ltd
- Kirton Livestock & Property Agents Farmer Livestock Agents
- BKB Louwid CMW Auctioneers
- Noord-KaapLewendehawe Ko-op (Bpk) Andre Kock & Son
- Namibia Livestock Auctioneers Hobson & Co
- Elite Afslaers Cape Eastern Livestock
- Rangrage Livestock Agency
All the above agencies arrange and plan fixed calendar auctions every year, at the same place /auction pens on a weekly, monthly, quarterly or even yearly basis. The venue for the auction is established and developed over years and its survival shows the need for such auctions.
The sellers and buyers at the calendar auction can vary according what is on offer and on the needs of both seller and buyer. The auctioneer, marketing officer, accountant, roll clerk and labourers facilitate the auction (their versatility even enables them to conduct real estate auctions).
A marketing officer will source the livestock for the auction, receive it at the auction pens, classify the animals in lots preferred by buyers and together with the auctioneer will source buyers to attend the auction.
The accountant will see to the financial administration – all statutory requirements as well as collecting payments and financing of buyers, and payments to sellers.
The roll clerk will keep accurate records of what is sold, by whom, the price of animals and details of the buyer.
Labourers will identify the animals and load them onto trucks to be delivered to the buyer’s venue.
A special auction is an auction requested by a seller or sellers to sell some their livestock, farms etc. It could be a dispersal sale if the seller stops farming.
OTHER ASSOCIATIONS
- South African Federation of Livestock Auctioneers (SAFLA) is a federation for livestock auctioneers.
- SA Feedlot Association (SAFA)
- South African Institute of Auctioneers (SAIA)