The financial difficulties experienced in the 2017/18 financial year hindered the Corporation from paying producers above the South African parity price. As is, in line with the Meatco mandate of maximising best returns for producers.

However, since March 2018 Meatco has managed to pay producers well above the RSA parity price across all grades, excluding fat equalisation and weight premiums. Meatco is aware that the ratio between slaughter and weaner prices is not favourable towards the slaughter of ox production system. Taking into account the current downward trend of weaner prices together with the improvement in Meatco’s slaughter prices, farmers should once again be motivated to move into slaughter cattle production.

Despite, the present strenuous environment where the factory is running at 45 percent capacity, Meatco is still paying competitive prices to its producers on an international level. Below is a graph on the price comparison of B2-Grades for the past five years.

RSA vs Namibia B2-Grade carcass purchase price

“Cattle delivered to Meatco directly from the farmer remain the preferred supply channel. Meatco acknowledges that the 2017 slaughter prices paid below parity resulted, amongst others, in a record number of animals exported live to neighbouring SA. We therefore, expect availability of slaughter cattle to be a challenge in the next coming years due to depleted stock," Livestock Procurement, Executive: Heiner Böhme says.

 “In a bid to ensure maximum capacity utilisation through our factory whilst increasing efficiencies and maximising producer returns, Meatco will need to continue with the Backwards Integration Initiatives as well," Böhme concluded.