The number of livestock slaughtered in Namibia in 2022 is lower compared to 2021, according to data from Somonis Storm, a Namibian stockbrokerage and investment research firm.
In its latest report, the number of local livestock slaughtered here remains on a downward trend.Cattle slaughtering decreased by 28.1% year-on-year, sheep by 4.1% and goats by 20.3% in October 2022.
Only pig slaughtering recorded an expansion, rising 7.6% year-on-year in October 2022. Live exports are still significantly higher compared to exports a year ago.
However, cattle exports increased by 23.1% year-on-year, sheep by 3.6% and goats by 50.1% in October 2022.
South Africa and Botswana were the sole export destination for mutton and pig products, respectively. Most beef product exports went to the European Union (71.4%), South Africa (12.8%), China (12.4%) and Norway (3.2%) following a lift of export bans in 3Q2022.
Total livestock marketing activity, that is slaughtering and exports combined, has recorded higher levels throughout most of 2022 year-on-year.
Cattle marketing activity increased by 4.4%, while sheep marketing increased 43.0% year-on-year compared to the same period last year (January to October).
These levels should largely support growth in the agriculture industry, given that livestock is the largest sub-sector in the industry.
Namibian export abattoirs reduced the sheep A2 carcass price differential against the Northern Cape abattoirs to only 27 cents during October 2022, from the N$6.18/kg differential observed in October 2021.
“The pork ceiling price also increased by 18.4% due to an increase in the South African reference price as well as the effect of the revised formula of the pork ceiling price” according to the Meat Board.
Auction prices have largely remained on a slight upward trend since the start of the year.
Year-to-date, goat auction prices increased by 6.7%, lambby 3.0% and the pork ceiling price increased by 17.8%.
Cattle (tollies) auction prices were the only category that recorded price declines, where auction prices decreased by 3.3%.
Weaner prices exceeded cattle prices for some time as South Africans paid higher prices during restocking times and as farmers expanded herds following the drought period.
However, this trend has reversed since mid-2022.
The value of fish exports decreased by 20.4% year-on-year in September 2022, compared to -4.5% year-on-yearin August 2022.
Monthly, fish exports decreased by 21.9% month-to-month in September 2022, compared to a rise of 16.5% month-to-month in August 2022.
Year-to-date, the value of fish exports is marginally above the value of exports recorded in the same period last year (January to September).
Year-to-date, a value of N$7,8 billion was recorded in 2022, compared to N$7.9 billion in 2021, up by 1.8%.
Fish exports account for 12.5% of total exports on average in 2022 and Year-to-date fish exports account for 5.7% of real GDP, making the local fish industry a crucial export earner for Namibia.
A weaker Rand/USD exchange rate would also have benefited export earnings in the second half of this year.
Average farmgate prices for various horticulture products have decreased by 4.6% on an annual basis in September 2022, according to the latest data available from the Namibian Agronomic Board (NAB).
At the same time, average retail prices have increased by 25.0%.
This is a clear indication of an increase in business costs as fuel (i.e. diesel), plastic, packaging and other materials have seen significant price increases in recent months.
On average, retailers charge 2.7 times more than what farmers charge, with the largest retailer premium being recorded on butternut (4.9 times), green peppers (4.8 times) and sweet potatoes (3.3 times).
“We believe that an abuse of market power by wholesalers can also partly explain the big price differentials between farmgate and retail prices as indicated by some farmers we have spoken to,”Somonis Storm said.
The agency further said that the La Nina phenomenon is expected to bring above-average rainfall between late 2022 and early 2023, according to weather forecasters in South Africa.
“It remains to be seen whether this time round, all crop-growing areas in the Northern part of Namibia will receive sufficient rain at the right time.”
Namibia, the agency observed, would need better rainfall in Angola (to benefit the Ruacana hydro-power station as rivers in Angola feed Ruacana) and Zambia (as NamPower increased electricity purchases from Zambia’s hydropower station and reduced purchases from coal-intensive Eskom).
Above-average rainfall will also hopefully improve water dam levels across Namibia. Currently, Namibia’s dam water levels have been reduced from the summer season earlier this year.
Global fertiliser prices have declined by 20.4% since peaking in April 2022.
“Many European fertiliser plants have been forced to close or curb output over the past year as the energy crisis squeezed supplies of gas that nitrogen nutrients are derived from,” according to Investec.
This has reduced fertiliser availability and increased prices across the globe, prompting farmers to use less and threatening harvests.
Rising global fertiliser prices have also increased production costs locally as Namibia remains a net importer of fertiliser products.
All the same, signs of price easing and a strengthening Rand/USD exchange rate could mean that local farmers see a slight ease in production costs.
Still, diesel prices remain elevated and we expect additional price hikes due to global shortages of diesel and this could still weigh on farmers’ margins going forward.