Meatco expands micro-feedlot procurement strategy
Meatco announced this week it has implemented a dynamic new Livestock Procurement approach that will include adopting a stronger policy of backwards integration and taking a more aggressive role in the different ways the corporation buys cattle. The meat producer said it will shift value adding further to the start of the cattle production chain and will be to the benefit of producers.
“This new approach aims to move value addition further back in the cattle production value chain, to benefit producers and to create a dialogue to address the declining number of cattle in the industry at policy level. The approach is also aimed at reaching out to both communal and commercial cattle producers, helping them run successful farming operations” said Meatco in the official announcment.
“This is meant to transform Meatco into a more competitive and consumer-oriented business,” said Heiner Böhme, Meatco’s Executive for Procurement. The new Livestock Procurement approach includes a feedlot, special projects and a veldt procurement strategy.
Meatco emphasised that backwards integration refers to taking ownership of their supply chain in the hope of securing an adequate supply of cattle.
Mario Poolman, Manager: Communication and Marketing explained the new procurement policy to the Economist saying “The capital outlay to erect a feedlot is very high. What we have opted to do, is to establish relationships with farmers close to water sources including the Grootfontein Otavi area and to establish what we refer to as “micro-feedlots”. With this initiative, farmers grow their own fodder and operate small feedlots with Meatco’s help. “We have a number of these micro-feedlot arrangements across the country and the number of cattle currently on the programme amounts to about 6000 on the ground. This approach is less capital intensive and shares the risk involved with the operation between Meatco and the farmer. We are effectively business partners.”
“Setting up a feedlot in the Northern Communal Areas (NCA) is something Meatco is very interested in and actively pursuing. A feedlot in the NCA would mean increased throughput and quality at our NCA abattoirs, something that would help tremendously with the profitability of our business in the region. So we are still actively looking at setting up a feedlot in the NCA, with the help of other stakeholders, as this will benefit the producers in the NCA and Meatco. Secondly, we are expanding our feedlotting footprint south of the Veterinary Cordon Fence through the micro-feedlot initiative,” said Poolman.
“Micro-feedlots in the NCA are also not viable at the moment, because of a lack of skilled farmers to operate them and because there is still a capital outlay required which most farmers in these areas are not able to carry. There are opportunities through partnership with the government, donors and other stakeholders to set up a feedlot in the area. There were earlier attempts by Meatco to set up a feedlot at Etunda, not only because it was close to a water source but also because it was already developed so that fodder planting could happen immediately – which would reduce the cost of setting up the feedlot. The government at the time felt that it was not the purpose of the Green Scheme to producer fodder, but rather crops for human consumption,” Poolman concluded.