Farmer’s Weekly carried an article noting South African farmers’ concern that Botswana’s ambitions to export live cattle which could end up in South Africa, would add pressure on prices. This is an understandable concern given that the South African beef industry has experienced financial pressures because of the ban on exports earlier this year following an outbreak of foot-and-mouth disease. Exports to a couple of markets have resumed since, but the industry is not completely out of the woods. Rising feed costs on the back of a poor maize harvest is another challenge.

But there is another way of looking into this Botswana live cattle exports story, which I will try to illustrate by highlighting three points.

Firstly, these countries (South Africa and Botswana) are part of the same trade block — The Southern African Development Community – which means there is a free movement of goods amongst member states.

Secondly, Botswana’s cattle herd is six times smaller than that of South Africa – as illustrated in Figure 1 below – at 2.1 million. This is according to data from the Food and Agricultural Organization of the United Nations (FAO).

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Figure 1: South Africa and Botswana cattle herd
Source: FAO, DAFF, and Agbiz Research

 

Lastly, Botswana is generally not a major exporter of live cattle. Over the past five years, the largest exports amounted to US$2.9 million according to data from the Trade Map.  By way of comparison, the value of South Africa’s live cattle exports averaged US$19.9 million over the past five years.

My sense is that if Botswana sends some of its live cattle to South Africa, it is conceivable that there might be a blip on cattle and beef prices, but the impact might not be notable as feared. Only time will tell.

My sense is that South Africa should increase its focus on expanding its export markets. This would ensure that there is no supply glut in the domestic market even if Botswana suddenly exports more live cattle to South Africa than we have seen in the past. The South Africa red meat industry and government have already made notable strides over the recent past, as illustrated in Figure 2 below.

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Figure 2: South Africa beef trade
Source: Trade Map, Agbiz Research

 

The one and most important thing for government, working with industry, is to increase investments in biosecurity so that South Africa’s beef export zeal is not interrupted as was the case earlier this year. So, my personal humble take on this matter is that we should monitor developments in Botswana, while at the same time increasing our efforts on the export expansion for great South African beef, folks.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

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