15 Feb 2019

The Meatco new booking system has been effective since 1 October last year.  The system is soo enhanced and simplified that producers’ can have easy access to market their livestock.  Producers are requested to book their cattle they intend to deliver to any Meatco facilities through the newly updated and more flexible system. The booking system has been implemented on a six months test basis.

  • No Delivery Agreements need to be signed;
  • The contract premium will be paid weekly with settlement;
  • The four contract signing periods will increase to 12 per year;
  • The merit points will be calculated real-time at each booking instead of over a period;
  • The merit-point calculation will be based only on the reliability, or subsequently accuracy of the load of cattle delivered;

The new system allows for two types of booking requests:

•          Advance Booking Request
•          Short-Notice Booking Request

Advance Booking Request

According to the new system, a producer who intends to deliver his/her cattle to a Meatco facility will request a booking one or two months prior to the delivery month. This would consequently result in 12 delivery periods per year.

The main advantage of an advance booking request for the producer means that his/her request will be considered first during the allocation run every month. With the new booking procedure, producers will receive their booking confirmations approximately one month before delivery.

Short-Notice Booking Request

The Short-Notice Booking Request allows producers to book one day up to one month ahead of the delivery month.

This means producers can request a booking between 1 and 30 of any month to deliver their cattle in the following month, or request a booking within the same delivery month.

Allocations from Short-Notice Booking Requests depend on quota availability (slaughter space available) at the respective facility.

“The difference between the new booking system and the previous delivery agreement is that deliveries are measured according to a specific booking and one booking does not influence another. Producers are required to state their name/legal entity, producer number and preferred date or time frame for the quantity of cattle they want to deliver. A producer can also indicate an “exclusion date”, which is a specific day or date frame during the month when he/she cannot deliver animals, for example, going on holiday.  The booking system further allows for a decrease in the planning period for the producer,” Manager: Livestock Procurement Commercial, Abrie van Wyk said.

"From a Meatco perspective, a shorter planning period for the producer will result in improved delivery accuracy. Because producers will now only plan for one month before delivery, there are fewer cancellations and ‘no-shows’ expected.”

“Producers will now have their N$2.50 per kilogram contract premium included in the announced producer price when delivering to the export abattoir,” Van Wyk added.  

With the new merit point’s calculation system, Meatco wants to distinguish the probability of converting a booking request into a delivery. Therefore, booking preferences will be awarded to the legal entity with the highest merit points, in other words, Meatco will no longer award merit points based on producer numbers, but only on a legal entity registered on the company’s database.

 The merit points system is determined through bookings done at all Meatco facilities (factory, feedlot, etc.), which will be incorporated into one merit point for the specific legal entity.

The total point for one booking is 100 and the average of the last 10 booking (deliveries) points become the producers' accumulated merit point. Therefore, every booking point equals one-tenth on the producers' merit points.
The new merit point calculation system is used and measures one of the following elements of a booking or delivery:
•          Reliability
•          Accuracy
The reliability of Meatco on the producers’ ability to deliver a booked load is considered when calculating a booking point. Therefore, the following aspects are evaluated:
•          All cancellations will have a default of a 10-point penalty.
•          All cancellations within 30 days will attract an additional 3 points penalty for each day as the delivery date approaches.

Cancellation scenarios:

•          Producer cancels 40 days before delivery: 100 - (10 + (0 x 3)) = 90 booking points
•          Producer cancels 30 days before delivery: 100 - (10 + (0 x 3)) = 90 booking points
•          Producer cancels 29 days before delivery: 100 - (10 + (1 x 3)) = 87 booking points
•          Producer cancels 20 days before delivery: 100 - (10 + (10 x 3)) = 60 booking points
•          Producer cancels a day before delivery: 100 - (10 + (29 x 3)) = 3 booking points
•          No-show: 100 - (10 + (30 x 3)) = 0 booking points

Here, it is a question of how accurate a delivery is in correspondence to the booking. Therefore, the following aspects are evaluated during a booking point through the determination of the load's accuracy.
•          2.5 points penalty for every animal below or above the booked quantity.
•          The maximum point of penalties is 100 points.
Accuracy scenarios: 
•          In case of 40 animals booked; 40 delivered: 100 - (0 x 2.5) = 100 booking points
•          In case of 40 animals booked; 39 delivered: 100 - (1 x 2.5) = 97.5 booking points
•          In case of 20 animals booked; 5 delivered: 100 - (15 x 2.5) = 62.5 booking points
•          In case of 36 booked animals; 1 delivered: 100 - (35 x 2.5) = 12.5 booking points
•          In case of 1 booked animal; 36 delivered: 100 - (35 x 2.5) = 12.5 booking points
•          In case of 1 booked animal; 45 delivered: 100 - (44 x 2.5) = 0 booking points
“The new merit point system has been simplified for producers to calculate their own merit points for each legal entity. Furthermore, merit points will be calculated based on deliveries to all Meatco facilities. The system is also self-motivated, meaning should producers strive to obtain 100 merit points, they need to deliver precise cattle numbers,” Manager: Livestock Procurement Commercial, Abrie van Wyk said.

“Additionally, merit point calculations are calculated in real-time and immediately adjusted after each delivery. The system also allows for producers to determine their own evaluation period due to the flexibility of a no-time period placed on bookings (the more bookings, the faster it is to change merit points).
“It should be noted that the current merit point for each producer will be the point used for the last 10 booking points in the new merit point system,” Van Wyk said.