Beef market unravels
The Directorate of Veterinary Services is closing down Meatco’s Okapuka feedlot for 8 months from this week after growth hormones were detected twice in urine samples from the cattle. Meatco said this draconian move will cost them more than N$143 million in forfeited income.
Meatco was earlier in the year granted an additional 400 tonnes Norwegian beef quota which also hangs in the balance, Meatco CEO, Advocate Vekui Rukoro, said this week at their northern industrial plant and headquarters in Windhoek.
The repeat infringement, found within a period of 12 months could lead to the permanent closure of the Okapuka feedlot, he said.
“This is very important for us as a country to fulfill our awarded quota to show the competence to the Norwegian government and also for our future.” Rukoro said on the unused export quota that lapses at the end of the year.
At current slaughter volumes Meatco would be forced to drop current beef price by N$7.15 per kg to compensate for the 20 million kg lost production estimated at N$143.12 million. The 8-month closure of the Okapuka feedlot will cost Meatco N$17.89 million per month.
The meat processor said it buys cattle for its Okapuka feedlot to the value of more than N$12 million per month.
“These purchases will have to be suspended and as the border remains closed for the export of weaners, it is anticipated to have a material impact on the current weaner prices due to an oversupply with no other off-take.” Rukoro said.
The loss in export revenue for Namibia is estimated at N$10.77 million per month constituting 70% is of the abattoir sales. This figure, Rukoro said, is an estimate since other sources of cattle could be exploited. The feedlot sells on average cattle to the value of N$15.39 million per month to the abattoir to ensure effective throughput in the factory.
Meatco denies having introduced the hormone through its feedlot operation, claiming that the two detected traces occurred naturally. “It is therefore our submission that the actions implemented by the Directorate of Veterinary Services are harsh and excessive. We believe that the matter can still be resolved through simple interaction between the relevant competent authorities.” he said, hopeful that the feedlot will be reopened, clearing Meatco of any wrong doing.
The European Union being one of Meatco’s lucrative high value markets bans the use of hormones such as zeranol. The hormone does occur naturally and the presence of it could be due to several non deliberate factors such as the gender of the livestock, the diet and other environmental contaminants.