Concentrated production through feedlot farming is beginning to give South African red meat a competitive advantage in world markets that is beginning to translate into beefier figures altogether. But although the lure of bulkier exports is irresistible, the potential for beef producers to grow their figures lies in quality and not quantity, according to Gerhard Schutte, CEO of the Red Meat Producers’ Organisation. “Our market is strong because of our qualification standards,” he said, “because 78% of all local beef is consistently classified as A-grade.” This, Schutte explained, was thanks to “most of our cattle going through the feedlot system and in world terms it means young animals that are low in fat”. He explained that generally speaking South Africa’s feedlot cuts made for a rosier kind of beef that, although most First World countries preferred meat that was marblecoloured because it was fattier, was fast catching on. “We decided a few years ago that we needed to get into the pound and yuan markets and it’s proven to be a very successful strategy,” Schutte said. The surge in demand out east has been particularly significant. Karan Beef only gained access to the Chinese market in 2017 but 4.34 million tonnes were shipped there in the yearto-November, compared to the 4.68 million tonnes it sent to the Middle East, a market to which it has been exporting since 2000. The company’s feedlot in southern Gauteng holds 160 000 head of cattle, is the biggest facility of its kind in the world, and clinched a record shareholding deal when it sold a 90% stake for R5.2bn to a joint venture between the Public Investment Corporation and blackowned Pelo Agricultural Holdings. A rival bid for R6bn was rejected because the concern involved wanted to ship the feedlot’s entire output to China. Had it been sold to the higher bidder the deal would have significantly affected local consumption which depends on the feedlot for 70% of South Africa’s supply. Nevertheless, it goes to show to what extent Chinese demand for South African beef has shot up in a relatively short period of time. According to Schutte, local lean beef has an additional advantage in that our meat is on average 30% cheaper than overseas beef. Such is the competitive edge of local producers that in certain circles there’s been talk of “marbling” South African meat to go head-to-head with leading exporters. “But I don’t buy into the argument of putting out meat that matches the same kind of intra-muscular fat of beef from abroad,” Schutte said. “We will never be able to compete with the likes of America, Australia and Brazil. Our exports amount to one percent of world consumption and volume simply isn’t one of our strengths. “We should rather be focusing on the fact that our quality alone is setting us apart, positively positioning us to develop niche markets for higher-grade beef.” Schutte added that in terms of region, South Africa also had an edge over its closest beef-producing rivals – Namibia and Botswana. “Primarily they practise open farming and will never be able to match the consistent daily output of quality beef we are producing.” But South Africa’s red meat industry is not free of challenges. Schutte warned against the prevailing threat of foot and mouth disease and stressed the importance of increased expertise by the relevant government departments to ensure sustained export protocol adherence. He added that as the local industry grew it should be able to build its own capacity. From a developmental point of view, feedlot farming could also assist previously disadvantaged farmers whose herds accounted for 40% of South Africa’s cattle quantum, Schutte said.
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We should be focusing on the fact that our quality alone is setting us apart. – Gerhard Schutte
