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Destocking frenzy hit nation as drought bites

A cattle destocking frenzy is in motion with a number of abattoirs getting an overwhelming supply of cattle, resulting in some suspending slaughtering as farmers have started laying off stock in the face of a crippling drought.

The situation has led abattoirs to go beyond the stipulated 72 hours of animal stay before slaughter while farmers face the challenge of transporting their animals from as far as Binga and Gokwe to Bulawayo in a bid to get better prices.

The overwhelming supply of cattle to the abattoirs is a response to the Government’s advice to farmers to destock and avoid losses as the effects of El Nino start to sink in.

The destocking exercise going on countrywide is also expected to knock down the prices of beef significantly.

A snap survey conducted by Sunday News revealed huge numbers of cattle in the lairage with some having more than 600 to 700 animals which they said would take time to clear since their cold rooms were already full which was the reason for suspending slaughtering.

It was a hive of activity at Mbokodo, one of the popular abattoirs on the outskirts of Bulawayo along Bulawayo-Plumtree Road on Wednesday with farmers having come all the way from as far as Gokwe, Binga, Nkayi, Lupane and Insiza to sell their cattle on Wednesday.

In an interview, Mbokodo Abattoir manager, Neil Klein said they have increased the number of cattle that they slaughter.

“It is a nationwide thing that is going on as more farmers are destocking. Our average kill these days is about 150 cattle per day which is way above our normal kill, but we mainly do service slaughter where we buy some of the meat while some of it is taken to different butcheries,” he said.

“We are not really suffering as yet compared to other abattoirs in the Midlands and Harare.

In Harare, some abattoirs have up to 500 cattle that are waiting to be slaughtered and according to the law, the animals are only supposed to stay for 72 hours but now with the current situation there is nothing we can do.”

He said farmers were having a hard time trying to access feed for their animals as there were no pastures for animals to graze while the commercial stock feed was steep for them.

Klein said some farmers were destocking to try and buy stockfeed such as hay bales so that the remainder of their cattle could survive.

He said although the prices of beef had gone down, they were likely to start going up in a few months to come.

In terms of the beef producer prices, he said their current slaughter fees for commercial was going for US$1.90 a kg down from US$4.20 to US$4.50 in December while economy was at US$1.70 from about US$3.70 and manufacture at US$1.20.

Klein, however, said at the rate that cattle were currently being slaughtered, prices were envisaged to shoot up four months down the line due to a decrease in the supply of cattle.

“You will find out that in a few months’ time when there will be a shortage, those prices could either double up. Prices have gone down because of the number of cattle being slaughtered currently,” he said.

“We have been advising farmers to work together to get hay bales and buy stock feed in groups but they are living from hand to mouth so it’s hard for some of these people to try and save their animals. They can approach stockfeed companies and after a few months when their cattle are now in a better condition. They can get better prices and pay back what they owe.”

In a notice to farmers, MC Meats Abattoir in Masvingo said they have suspended slaughtering due to the influx of animals that were coming in for slaughter.

“Good day, our valued producers. We have temporarily suspended cattle collections until further notice. It means, therefore, all booked cattle are placed on hold and we will call you when meat sales improve. Call first before sending cattle to avoid disappointments. Thank you,” read the notice.

The abattoir’s general manager, Jordy Young said they suspended slaughter for a day due to an oversupply.

He said the notice was motivated by the need to avoid a scenario where they have huge numbers in their lairage adding that there was a need to understand some of the fundamentals of the industry in order to apply the right context to the situation.

“The factors of supply and demand plays a primary role in our industry due to the perishable nature of the products. It is normal to have an influx of cattle early in the year for a few reasons. School fees, destocking of cull stock in preparation for the dry season being the primary of these.”

Young said when supply is more than demand economics dictates that prices should go down.

“This year the implementation of value added tax (VAT) on meat products and livestock has compounded the problem as it has made products unaffordable for a larger sector of the market which has had a knock on effect, pushing prices down to an unsustainable level for farmers, who unfortunately have to offload a larger proportion of their herd due to the expected drought,” he said.

The situation where abattoirs are suspending slaughtering has troubled farmers who would have come as far as Gokwe.

Godfrey Hunda – a farmer from Simbe communal area in Gokwe said they were destocking so that they could use the proceeds to get stockfeed.

“Out of a herd of 12 cattle l came with four cattle so that l can sell them and be able to get money to buy stockfeed for the remainder. The drought has really taken a toll on us as farmers and destocking is the only solution so that we do not keep on losing more of our animals,” he said.

“However, with the current influx of beef on the market, beef producer prices have plummeted with a cow that would fetch about US$900 in December now selling at US$380. Worse-off middlemen are ripping off farmers and taking our animals for as low as US$150.”

Another farmer from Binga, Siphiwe Mdimba said they did not harvest anything, while stockfeed was expensive for them.

“We have nothing to feed our cattle, there are no pastures and water bodies are dry. Coming all the way from Binga to have our cattle slaughtered here in Bulawayo is also costing us as farmers but there is nothing we can do. l brought two cows and transporting each cost US$60 but there is nothing we can do because we also want to survive and take care of our families,” she said.

CSC-Boustead Beef Zimbabwe consultant Reginald Shoko said they had not started facing the dilemma of having huge numbers of animals in lairage at their abattoir.

“We mainly do toll slaughter but the farmer is losing, unfortunately. There is no mitigating intervention in sight in the immediate future due to the drought and the ravaging January disease.

“The oversupply of beef is concerning as it will lead to several challenges in the market. An increased supply not met with demand often results in price wars among competitors, shrinking profit margins and even potential business closure. Moreover, excessive inventory can lead to storage issues, increased holding costs, and ultimately wastage,” he said.

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