Niche markets offer a more lucrative future to Namibian free-range meat producers
By Dr HJ Sartorius von Bach
Consulting agricultural economist
For the past decades, Namibian livestock farmers (red meat, mutton and game) have been experiencing a profitability decline in real terms, often referred to as the cost price squeeze effect, and highlighted in many popular articles.
The farmers’ revenue did not respond to global changes. It is alarming to observe that livestock production had to continue at the cost of the natural environment, which affected the economy, job creation, and other downstream activities. However, the financial decline of the livestock sector is the result of many factors, which should not only be attributed to the degradation of natural resources.
The farmers’ efficiency measures could not halt this downturn and it resulted in a situation where Namibia lost some of its comparative advantage to other countries. A comparison between countries’ beef margin analysis shows that the Namibian red meat producer could earn more if marketing, especially of prime cuts, is done differently.
To illustrate this by an example: A Namibian cattle carcass
leaves the farm gate at US$3.13/kg to be exported to Norway to enter their retail market for an aggregate US$10.95/kg, of which the retail fillet will cost on average US$55.45/kg to be further channelled to the end-consumer in a restaurant for US$93.96/kg.
It should be clear that this is a result of meat traders without power to lobby for better prices, and who are forced to accept unrealistic profits in the value chain that harm the Namibian livestock sector.
Besides the pressure on meat traders, feedlots are also under pressure to reduce production to be compliant with environmental compliances, i.e. the carbon footprint from these grain-fed ruminants is too high. Feedlots are taking a huge toll on the environment which includes the proliferation of antibiotic-resistant bacteria, the killing of aquatic eco-systems, polluting of soil, groundwater and air with heavy metals, phosphorus, nitrogen, pathogens, ammonia, hormones, and methane.
With a pricing system that indirectly discriminates against free-range and grass-fed beef, the industry supports producers to channel more and more cattle through feedlots at the cost of the consumer. This might be a threat to the Namibian cattle production system where farmers have to adjust to become or stay compliant. It may lead to farmers collectively moving into other production systems, such as game meat or pure free-range beef, mutton or poultry. While the agenda within the industry is not focused yet, producers will be unwilling to change because revenue streams from venison, free range beef or mutton are insufficient, but it can be adjusted based on consensus in the industry.
Since the 1970s, the Namibian-born Von la Chevallerie promoted venison as having better health benefits when compared to meat from feedlot animals. For the past two decades, researchers published some characteristics of game meat and venison being healthier than grain-fed cattle, such as the work by Viljoen (1999) with his lipid study on springbok. Reference was made that wild game and also free-range animals follow their natural diet and are more active than feedlot animals, which contribute to the lower fat content of the meat. Game species eat more quality grass species, green leaves and a bigger variety of plants than their domesticated counterparts, which leads to leaner meat and a lower content of pro-inflammatory omega-6 fatty acids.
According to the Linus Pauling Institute, these omega-6 fatty acids increase markers of inflammation in the body. Chronic inflammation in meat production is associated with health conditions including obesity, diabetes, cancer and rheumatoid arthritis. It is known that grain-fed cattle from feedlots are forced to an increased fat content in a short period, which also increases the omega-6 fatty acid content. The Encyclopedia of Healing Foods states that game meat has a higher omega-3 fatty acid content compared to feedlot beef, while grass-fed beef has a similar omega-3 fatty acid content.
Game meat is also a good source of vitamin B6, niacin, riboflavin and minerals, such as iron and zinc, which is the consequence of the natural variety of pasture game browses and grazes. The iron is necessary to prevent iron-deficiency, anaemia, while zinc functions as an antioxidant and is important for the immune system and for digestion. New research suggests that bacteria in the human digestive system could make feedlot beef eaters more prone to heart disease.
However, without a strong consumer lobby, the game meat price structure remains about two thirds lower than the beef producer price. The calories, protein and fat content of grain-fed meat and free-range game meat are significant different as shown in the following table. The figures show that grain-fed beef has almost double the calories of game, 15% more protein and 15 times more fat.
There are many organised consumer groups demanding that both venison and beef are classified transparently between grass-fed and grain-fed. Future consumers will expect accurate labelling and will require full transparency. Farmers and industry have to take note of these increasing consumer pressures. There will be an increasing number of consumers requiring grass-fed beef and game meat and they will be prepared to pay higher prices but we need to guarantee the quality. In this regard, we need to protect our inherent advantageous meat properties, to prove that our Namibian free-range meat can be branded as food contributing to saving our planet.
This will require:
* Guaranteed traceability from origin to the end consumer;
* Assured hormone-free and organic pasture-raised dairy;
* Complying to the ideal ratio between Omega-3 to Omega-6 fatty acids, making game meat and venison some of the healthiest sources of good fat on earth;
* Guaranteed antibiotic-free game meat and free-range beef;
* Assured food safety practices to reduce chronic wasting disease and bovine tuberculosis;
* Guaranteed animal friendly practices to walk, run and roam all day to lower the risk of food-borne disease;
* Guaranteed ammonia-free mince-meat (which would remove Escherichia coli that slowly harms the human body with its toxicity);
* Guaranteed supply of the ideal source of conjugated linoleic acid (which has been researched for its anti-cancer properties); and
* Contributing to the reduction of the carbon footprint, but we also will need to prove the water balance to protein produced to be compliant with a planet saving brand.
The above will not be enough to find the market for this specific origin-based meat product. Our meat industry needs to start with measures to register an Intellectual Property (IP) right to protect our proprietary claims and to benefit the meat supply chain with associated increased prices.
This initiative needs to be taken up with an organization such as Team Namibia, the Livestock Producers Association with support from the Ministry of Industrialisation, Trade and SME Development.
The global game producer prices were always significantly lower than prices for meat from domesticated animals. In Namibia, for example, the price per kilogram for Kudu or Oryx carcasses has been around N$20/kg for the past years, compared to an aggregate N$30/kg for beef carcasses.
Similar price differences were evident worldwide. However, 3 years ago, Norwegian reindeer prices started to jump and to pass the beef producer prices (pers com. Nils Sara). Currently, reindeer farmers receive significantly more NKr/kg than beef farmers, which is reflected in the retail price (NKr649/kg vs NKr449/kg). The inserts clearly show that the retail Reindeer fillet price is 30% higher than the retail price of beef fillet.
Norway achieved their higher prices through consumer confidence based on health arguments and the superb properties of free-range game meat. Their example and others should act as our call for niche marketing of Namibian grass-fed meat (at least the prime cuts) and to establish an intellectual property right protection. Our meat industry could use some lessons learned from the South African Karoo meat, which registered an IP and gained a price increase of an almost 20% premium above regular mutton.
Future traders of Namibian free-range redmeat or game meat must be knowledgeable of changing consumer preferences between countries to understand that cuts and types of meat differ, e.g. where lamb rib fetched the highest meat price per kg in South Africa over the festive season, mutton in Norway (although on all menus during the festive season) is regarded as a lower value meat and in particular ribs of which the retail price is only 17% of reindeer fillet.
Thus, niche markets have to be determined for our Namibian free-range meat to benefit everybody in the supply chain by fetching more realistic prices. It should be clear that export does not consists of primal cuts alone, but that the meat processors and manufacturers have a significant role to play to find niche markets for both cuts and processed meats. Only then the industry will grow and create job opportunities through multiplier effects, and the producers will re-investment to halt further financial downturn, to stop resource degradation and to start with nationwide pasture restoration.
It remains a fact, that Namibia will not be able to produce for the masses, but based on our typical free-range production system, we could follow existing trade patterns, such as the internationally accepted seasonal salmon fish or the Ferrero chocolate supply.
Therefore, our meat pricing system needs an adjustment to reflect trade differences between cuts and the trading of whole carcasses, e.g. two carcasses of equal grade can generate different returns; it depends where the processor traded it, and at what disadvantage to the supplying producer. With a revised meat trading strategy, there will be light in the tunnel to benefit the whole meat producing sector, but it will require that all role players collectively take ownership of the future.