1. Sustainable red meat production during challenging economic times Dr Frikkie Maré Department of Agricultural Economics
October 14, 2019

2. The good, the bad and the ugly

3. The good, the bad and the ugly: Beef
20% Increase
2018: The Bad
2% Increase
2019: The Ugly
Decrease?

4. The good, the bad and the ugly: Lamb
23% Increase
2018: The Bad
1% Increase
2019: The Ugly
Decrease?

5. Price determination

6. Demand, supply and equilibrium ≠ Static
Demand Shifters
P of complimentary goods
P of substitute goods
Income levels
Tastes and preferences
Expectations
Population
Supply Shifters
P of factors of production
P of other goods
Technology
Taxation
Expectations
Number of firms

7. Shifters: Slaughter Numbers
Source: RMLA (2018)

8. Shifters: Feed prices
Source: Grain SA (2019)

9. Shifters: Substitute products (pork)
Source: RMAA (2019)

10. Shifters: Economic Growth (GDP)
Source: STATS SA (2019)

11. Shifters: Economic Indicators (CPI, PPI & Prime)
Source: STATS SA (2019)

12. Shifters: unemployment
Source: STATS SA (2019)

13. Shifters: Meat consumption

14. Shifters: FMD

15. Shifters: exports Beef Exports = 3 000 t /month
= kilogram / month
= Steaks / month (200g)
Mutton/Lamb Exports
= 400 t /month
= kilogram / month
= Chops / month (100g)
Why Export  Domestic Market Small
Topside Exports to Kuwait: 24 ton container
$4.55/kg = R66/kg
Shipping cost on exporter
Profitable?

16. Price determination: Market

17. Market participants
Supply
Producers
Feedlots
Market
Abattoir
Demand
Wholesalers
Retailers
Consumers

18. Abattoir prices: a spanner in the works

19. price: beef

20. price: mutton

21. - Cambridge Dictionary -
challenge
“The situation of being faced with something that needs great mental or physical effort in order to be done successfully and therefore tests a person’s ability.”
- Cambridge Dictionary -

22. Playing the profitability game

23. Optimal input use – concept of marginality

24. Optimal input use – concept of marginality

25. Output planning
What to produce? When to produce? For whom to produce? Where to produce? The concept of value adding… Vertical integration Innovation Coordination

26. Concept and influence of opportunity cost
Opportunity cost is the value of an item in its highest alternative use:
Feed calf vs. Sell calf
Buy cattle/land vs. Other investments and returns
Land for own production vs. Land rental income
Farmer’s farm labour vs. Alternative work
10 Bulls for breeding vs. 1 Bull for AI vs. Semen straws
Holding back replacement heifers vs. Buying pregnant heifers vs. Contract Heifer Growing

27. The future

28. Thank You Dankie Dr Frikkie Maré (PhD) Academic Department Head
Department of
Agricultural Economics
T: +27(0)