Namibian Beef Sector

Introduction and History of the Cattle Industry in Namibia

CBPP disease was introduced unknowingly into southern Africa using an infected Friesland bull imported from Holland, which landed at Mossel Bay in South Africa in 1854. With over 100 000 cattle dying from CBPP during the next two years, this disease had extremely severe economic consequences for the whole southern African sub-continent, only to be matched by the rinderpest epidemic at the end of the 1890s. The disease caused high mortalities amongst the large cattle herds of central Namibia and impoverished a large part of the population.
Pinzgauer bull

Current Namibian Commercial Cattle Farming System

Namibia Commercial cattle farming. is an extensive farming system and economically the dominant livestock system. In Namibia, it contributes by far the largest share of total agricultural output and approximately 1 – 2% directly to GPD according to the MAWF (Ministry of Agriculture, Water and Forestry)
An estimated 2 250 commercial cattle farmers keep an average of 840 000 cattle. Of the 298 961 cattle that are on average marketed each year, roughly half (49%) are sold as live cattle (almost exclusively as weaners) whereas the other half (51%, almost, exclusively oxen) are sold as beef.

Commercial beef farms in Namibia (Otjozondjupa, Omahake, Komas provinces)
Almost all weaners are exported as live cattle to feed lots in South Africa (Schutz, 2010). Beef is primarily sold in South Africa (45%), overseas (37%) and other markets (3%) with only a small fraction consumed domestically (15%)
The commercial cattle farming area in Namibia covers approximately 14.5 million hectares (ha) of rangeland in the northern half of Namibia. It is confined at its southern and western fringes by areas too dry for farming and at its northern and eastern fringes by communal lands. On average, the commercial cattle farming area receives an annual rainfall of only 374 mm, with 95% (352 mm) of rainfall falling during the rainy season from November to April. Rainfall is low on average and varies considerably, both across rainy seasons and across individual farms. The rangeland’s production is rainfall-limited and strongly covaries with rainfall.
As such, precipitation risk directly transforms into rangeland production risk. (Degradation of rangelands in drylands is occurring at an alarming rate worldwide both in developed and developing countries. Conventional rangeland management assumes overstocking to be the main cause of degradation and thus frequently recommends reducing stock numbers to fixed stocking rates as the primary management intervention. However, practitioners and communal farmers from the drylands of Namibia have found such interventions not only to be socially unacceptable but also ineffective. Changing livestock numbers without changing management has minimal impacts.) Since commercial cattle farming in Namibia is extensive farming, the rangeland production risk in turn translates into cattle production and ultimately income risk.
Beyond being subject to low and highly variable rainfall, rangelands of the commercial cattle farming area are in an unsustainable state. They suffer from degradation due to bush encroachment, i.e., they have come to be dominated by woody vegetation. Bush encroachment entails a reduction in the rangeland’s overall production which is equivalent to a reduction in grazing capacity. A reduction in grazing capacity, in turn, diminishes farm income since grazing capacity directly relates to the number of cattle that may be supported by the rangeland. Bush encroachment across the commercial cattle farming region is illustrated by grazing capacity being nowadays much worse than the historic value of above 0.1 Large Stock Unit per hectare (LSU/ha) that was encountered on average across Namibia until the mid-1960s.

A farmer may manage the risk through several risk management strategies. These strategies either adjust the organization or production processes of the farm (“on-farm strategies”) or makes use of financial products or off-farm assets (“financial strategies”). The main on-farm strategies are:

1. Increasing the rangeland size (“rangeland size increase”).
2. Resting part of the rangeland to provide feed throughout the year (“resting rangeland”).
3. Providing cattle with purchased hay and licks (“additional feed”).
4. Choosing cattle breeds adapted to local environmental conditions (“breed adaptation”).
5. Choosing a production system, such as weaner or ox production, that is adapted to local environmental conditions (“production system adaptation”).

In addition, the main financial strategies are:

1. Agreeing on advances in livestock sales (“advances on livestock sales”).
2. Keeping a checking account as a financial buffer (“checking account as a buffer”).
3. Taking up loans for covering operating losses (“loans for covering operating losses”).
4. Obtaining income from off-farm sources (“off-farm income”).
5. Investing in agricultural derivatives (“investment into agricultural derivatives”).

Normative views of sustainability of farmers believe that ecosystem condition should be sustained at or above a threshold of 0.082 LSU/ha and annual net income at or above a threshold of N$ 275 791.12. Heterogeneity for both the normative view on ecosystem condition and income is high with standard deviations of 0.045 LSU/ha and N$ 206.97, respectively. Regarding the time horizon for sustaining ecosystem conditions and income, we find that 8.7% of farmers do not care about the future beyond their generation, whereas 16.1% of farmers have a very long outlook, i.e., ten generations or more. On average, farmers indicated that ecosystem condition and income ought to be sustained for the 3.3 generations following their generation, that is, for the generations of their children, grandchildren, and great-grandchildren. This is the timeframe that most farmers are expected to experience in their lifetime.

Saving Namibia’s Livestock Industry

Cattle can be used to trample gully heads. Implementation to deter soil degradation started in October 2013 in the Erora area as a trial, and was expanded to Otjitunganane in November 2014, and later to Otjijarua. Work is done with the participation of the communities so that they can take ownership of land restoration. 

“Vital to this approach has been the implementation of holistic planned grazing, based on combined herd grazing, to achieve critical recovery times. Despite the prevailing drought, we have achieved significant outcomes that indicate the effectiveness of our approach in building capacity and demonstrating natural resource outcomes. Our creative collaboration offers much nationally to rehydrate rangelands and communities, putting them in a better position to adapt to and even mitigate climate change locally.

Cattle trampling gully heads

3. Alternative Feeds for Livestock in Communal Areas:

“Cattle depend on natural pasture as a main source of feed, but the protein content of grass declines in the dry season. To boost the protein intake of livestock, it is a good idea in certain parts of the country to supplement their feed with forage legumes and crop residues such as groundnut, maize stover, and mucuna (velvet bean) hay reserved from the farmers’ previous harvests.”

Natural pasture

In a feed ration experiment for 56 days with maize stover offered ad libitum in various ratios with crushed maize, soya bean meal, soya bean residue, mucuna hay, mucuna seed, lablab hay, cowpea shells, groundnut residue, poultry litter, beef concentrate, minerals, and vitamins. The results were that the body weight of cattle fed on rations based on lablab or cowpea, mucuna and groundnut stover was significantly higher than that of commercial feeds or grass-fed cattle. Looking at the gross margin analysis of all the different feed rations, mucuna was the costliest option, but it achieved the highest gross profit margin per animal.

Forage seed production will be investigated in some parts of Namibia to improve pastures and provide fodder for livestock, improve soil (nitrogen fixation from legume crops, crop rotations, cover crops, and so forth), and diversify farm income sources.

The crops with the best gross margin were lablab and mucuna, followed by cowpea. It was widely adopted in Zimbabwe where it was planted in rotation with cereals. After planting mucuna, farmers found that the soil was significantly more fertile as a result of nitrogen fixation.

They also realised that mucuna seeds have a market value and started selling them to other farmers and development organisations. Indicative of the value farmers place on forage plants, mucuna seeds sold in 2014 in the Beitbridge area generated US$11 000. In 2018, seed sales for that area amounted to approximately US$50 000.

4. Regenerating Rangeland after thinning Encroacher Bush:

Farmers who make decisions to harvest biomass from bush-encroached rangeland bear enormous responsibility for the future condition of the rangeland. If biomass is harvested with disregard for the soil process represented by the bush encroachment phenomenon, then the condition of the rangeland is likely to worsen and support fewer animals. If, on the other hand, the soil process is not interrupted when deciding where and how to harvest and which follow-up treatment to apply, then the rangeland is likely to regenerate and support high production.

 Encroacher bush

Instead of blaming bushes for encroaching onto rangeland, it may be useful to view bush encroachment as a symptom of rangeland degradation, not its cause. Nature uses bushes to restore water and mineral cycles that have been disrupted by former land use practices. The reduction in bush covers those results from de-bushing often leads to more loss of rainwater to runoff from loamy soils and wind erosion of sandy soils.

Bushes act as fertility pumps, extracting soil minerals with their deep roots to grow leaves, wood, and more roots, which all feed animals and microbes that cycle minerals through the topsoil. If rangeland resources are harvested for sale off the land, be it milk or beef or hay or wood, then the minerals in those products can no longer cycle there, reducing the soil’s fertility.

This is unlike the few elements that cycle between the atmosphere and organisms, both living and dead, micro, and macro. These elements include hydrogen, carbon, oxygen, nitrogen and, to a limited extent, sulphur. If removed from plant material harvested in one part of the world, they get redistributed in the atmosphere and can be replaced into organisms and the soil in ecosystems that have other appropriate conditions to support plant growth.

They effectively get mined if not returned in some form or another. As de-bushing intensified in Namibia’s Thornbush Savanna, soil fertility declined dramatically. In addition, thirteen years after deforestation, there was no evidence of soil fertility recovery. Some minerals may be returned through animal licks, but these often contain excess sodium that spreads in dung and urine, further disrupting soil fertility.

If bushes are harvested along contour strips, as proposed by Johan Bruwer at the 2014 Namibian Rangeland Forum, then uncleared contour strips infiltrate rainwater, grow fertility and break wind, while cleared strips produce abundant grass if provided with sufficient rest as part of an appropriate grazing strategy.

Sketch map of de-bushed contour strips that are grazed every second year, alternating with uncleared bush strips

Such contour strips imitate the natural, self-reinforcing pattern of bush and grass strips encountered in some semiarid landscapes of the world, known by names such as banded vegetation in Australia and tiger bush in West Africa. Several examples of regenerative rangeland management approaches are included in the previous best practices. One such example of a simple yet effective grazing strategy is the Split Ranch Grazing Strategy. In its simplest form, it divides the grazing area into two, for year-long grazing to maintain grass in a nutritious state, and year-long resting to rebuild grass vigour for subsequent fast growth.

The year-long rest allows grass to both recover nutrients released by microbes during pulses of rain early in the rainy season and replenish root reserves late in the rainy season. If the perennial grass seed bank has become depleted due to continuous grazing over past decades, then it may be worthwhile sowing grass seeds within cleared strips and under bush filters.
Sowing grass seeds within cleared strips and under bush filters

If bush filters are constructed from cut branches along a contour they cool the soil, trap seeds and mulch, and encourage a dense growth of grass underneath, which slows runoff, enhancing infiltration of rainwater into the soil.

Old bush filters attract termites that puff up the soil underneath, which ponds rainwater over a wide strip on the upper side and eventually infiltrates to support abundant growth of grass if appropriate grazing management is applied. The perennial grasses growing under such bush filters take over the filtering function as the bushes decompose.

Appropriately balanced fertility may enhance the regrowth of grasses, giving them a competitive edge over the regrowth of bushes.

Bush filters constructed from cut branches along a contour

Namibia Livestock Strategy

The following is a summary of the strategy for the Namibian livestock sector for the next 15 years. The strategy consists of the following:

1. Growth goal – a measurable goal for the industry as a whole.
2. Critical success factors (CSF) – the 5 most important factors (see the following Figure) that will ensure that the growth goal is achieved:

• Increase on-farm productivity.
• Competitive & fully integrated value chain.
• Unlock the market for NCA.
• Protect & improve the veterinary status.
• Reliable industry data.

3. Strategic initiatives – the different actions needed to ensure that every CSF is achieved.
4. Enabler – factors needed to support the implementation of the CSFs.

Namibia growth strategy

Strategic Issues Affecting the Namibian Livestock Sector

The following industry pointers have been identified and will determine the future strategy of the Namibian Livestock sector:

• The local beef slaughter market and the live export market grew to the detriment of the export slaughter market.
• The cost of the impact of Government intervention in the small stock marketing sector outweighs the benefits generated.
• Since 2006, the cattle herd SVCF increased, while the small stock decreased.
• A key strategic determinant that will influence whether local value-adding will increase in future is the competitiveness of the local export value chains against the other.
• A detailed analysis of the reasons for the loss in the competitiveness of the Meatco
• Value chain, local slaughter chain, and RSA feedlot chain must be done to understand the change in the relative competitiveness of the different value chains.
• Since the Beef: Maize ratio is currently on breakeven levels for South African feedlots, it is anticipated that Namibian weaner prices will stabilise in the medium term.
• Weaner production is currently the most profitable production system, with weaner-ox the least profitable. However, due to the devaluation of the Rand and increasing maize prices, the profitability of weaner-ox production can recover over the medium term.
• The on-farm productivity of cattle, sheep and goats is low, with big growth potential for the industry.
• Feedlots are currently not viable in Namibia.
• Industry data is not comprehensive, especially information on the national livestock herd, the size of the local formal and informal markets, as well information on farm productivity.
• A change in the beef export marketing strategy took place with more direct marketing to international retailers by Meatco.
• The importance of the involvement of the industry SVCF (South of the Veterinary Cordon Fence (SVCF), to assist in the development of the livestock sector NVCF (North of the Veterinary Cordon Fence) cannot be over-emphasised.
• The goat industry is a key sector that enhances the livelihoods of especially small-scale and communal farmers. The religious market for goats must be protected and provided with healthy, good-quality goats.

Namibia’s Rising Inflation forecast problems for the Agriculture Sector

The rising inflation rate in Namibia can partly be ascribed to the unprecedented spike in the price of agricultural inputs during 2021. The country recorded a 3.6% annual inflation rate for October 2021, up from 2.3% recorded in October 2020. The rate of inflation was expected to rise further in the fourth quarter of this year, due to increases in fuel prices, among other costs. The prices of certain agricultural inputs had increased by almost 50% over the past year. The price of urea, for example, increased by 48% from R6.80/kg in September 2020 to R10.10/kg in September 2021, while phosphate increased 45% from R10.10/kg to R14.60/kg during the same period. “Given the fact that these two products form an integral part of animal feed, it makes sense that the inflation shot up as much. Because the Namibian dollar is linked to the South African rand, we are extremely vulnerable to international price movements and a weakening rand. “While agricultural input prices are extremely high worldwide, our situation is made worse by the fact that a large majority of our inputs are imported from South Africa [and subject to] exorbitant transport costs.
Similarly, animal medicine costs increased by 11%, maintenance costs as well as fixed improvements increased by 10%, and feed and supplements increased by 7% in the third quarter of 2021. Meanwhile, beef cattle prices in Namibia increased 18.68% in the third quarter to an average of R55.98/kg for mature animals, and R38.20/kg for weaners. When looking at the variability of the different production systems per hectare, cow and weaner calf production is still the most profitable at a turnover of R37.13/ha. The weaner ox production system has improved but is still at a negative of -R25.87/ha.

Importance of Local Marketing and Export Market

The following Figure indicates an estimated value for the producer of bovine animals exported in Namibia.

The export value of meat of bovine animals fresh or chilled from 2009 – 2020

According to the Meat Board of Namibia, Botswana was identified as such a source due to its similar environmental conditions and a Foot-and-mouth disease-free zone to that of Namibia. In addition, the Botswana government has temporarily lifted its moratorium on live exports and Namibian abattoirs may take advantage of it. “However, only male animals may be imported from Botswana’s free Foot and Mouth Disease Zone subject to strict import requirements of the Namibian Directorate Veterinary Services.

Export of live animals 2009- 2020
Namibia would have a choice as to which market to supply, and indicated export income would have to be sacrificed to ensure local supply. “The priority in this battle is the local market, so very few cattle will be available for export. The greatest challenge currently is managing the lack of productivity as cost-effectively as possible. “Namibia’s shortage of slaughtered cattle is a problem only to be solved with a long-term vision. After seven years of drought, farmers have barely managed to keep their cows alive. Therefore, most of the cattle will be young cattle or old cows, and the young cows would rebuild herds. the main challenge for 2021 was meeting Norway’s quota for the year. The requirement is between 20 000 and 22 000 head of cattle “if only high-value cuts had to be exported,”. At that stage “it appears that the country did not have more than 30 000 slaughter cattle available.

Beef Value Chain Forum (BVCF), a consortium formed by Namibian beef producers, has so far raised N$146 million (US$9.8m) to be channelled towards the establishment of a new beef processing facility targeting the export market, known as Savanna Beef Processors Limited. The BVCF was officially inaugurated in 2021 with a growing membership base of over 500 members, to increase the profitability of cattle producers by creating a world-class brand through local value addition.
This the consortium has highlighted will be achieved through the construction of a state-of-the-art abattoir and processing facility, to tap into the world beef market. Namibia is the leading producer and exporter of beef in Africa; however, the country has in the recent past exported more live animals as compared to value-added meat.
According to the Meat Board of Namibia, in the first five months of 2021, the Southern African country exported 45 623 live animals, while local slaughtering stood at 29 379 head of cattle for both export and local consumption during the period under review.
In the entire of 2021, only 25% of all cattle marketed were slaughtered at export abattoirs. Currently, Meatco is the biggest exporter of beef in the country, and it appears plans are fast advancing to unseat the state-owned entity from its prestigious position.
The parastatal, according to reports by The Namibian has been experiencing a power struggle among dissatisfied producers. It is envisaged that the new facility will have the capacity to retain an additional 50 000 weaners for slaughter cattle production through a positive weaner-to-slaughter-cattle price ratio. To make this a reality BVCF requires a total of N$200 million (US$13.4m), having already raised 70% of the equity target from 549 producers. (2022)
The first round of funding for the new export abattoir lasted from 24 April to 24 June 2022, during which Cirrus Capital, the corporate/transaction advisers, travelled throughout the country with members of the BVCF task team to present the project’s investment strategy and business plan to Namibia’s beef producers.

Why does Namibia have a Veterinary Cordon Fence?

NAMIBIA’S veterinary cordon fence (VCF), also known as the redline, is a stock disease control mechanism that protects Namibia’s beef exporting industry from stock diseases, such as foot-and-mouth and lung sickness. Over the years, Namibia’s beef exporting industry has built a reputation as an industry that is committed to high standards. This has enabled Namibia to export meat to countries in the European Union and other countries, such as the United Kingdom (UK), Norway and South Africa.
In 2020, Namibia became the first African country to export red meat to the United States (US). In the 2017/18 financial year, Namibia’s agricultural exports contributed N$5,77 billion to the Namibian economy. Of this amount, N$3,4 billion came from beef exports, while the rest came from exporting sheep and goat, charcoal, grapes and from trophy hunting. Beef exports play an important role in the Namibian agricultural economy, and stringent disease-control measures are crucial in sustaining Namibia’s beef exporting industry.

The Redline:

However, the history of the redline is a controversy that dates to the early years of Germany’s colonial rule over Namibia. In 1896, Namibia suffered a serious outbreak of rinderpest (cattle disease), which had a devastating effect on its livestock production. It is estimated that the Ovaherero communities lost up to half their cattle herds at the time. German settlers, who mostly lived in the central and southern parts of Namibia at.

Food and mouth disease affected, protected and free zones