Many communal farmers are not aware of prevailing market dynamics and livestock pricing structures, and this can cost them dearly when selling their animals, says Shane Brody.
Speculators often purchase livestock at prices considerably lower than the prevailing ones, and if considering how many thousands of livestock units are sold within the vast communal farming areas of South Africa annually, income loss can amount to vast sums of money.
Just consider that the 10 former homeland regions are approximately 16 million hectares in extent, and these areas contain hundreds of thousands of small-scale livestock farmers who collectively own a meaningful percentage of the overall livestock in South Africa.
However, due to various capacity and logistics challenges, these producers are not well represented in terms of supplying slaughter animals to the formal red meat markets. This, I hope, is something that the Department of Agriculture will address going forward.
Like many farmers, I receive weekly livestock prices via SMS. These prevailing market prices are disseminated by red meat commodity groups and indicate what a farmer can expect to be paid for various classes of cattle, sheep and pigs.
The advice usually indicates the grades of slaughter livestock (A, B, or C) – meaning baby beef or lamb (A), medium aged (B), or mature/older (C).
Next to each of these grades will be a price, for example C = R43,50, and this means the price you can expect per kilogram for the carcass once the mature/older cow or sheep is slaughtered.
Remember that there are factors or prerequisites listed hereunder that determine if you obtain this price. Red meat is not only graded by age but also by fat covering and conformation/shape of the carcass.
Prices for lambs and calves are quite easy to calculate. If the price next to ‘weaner calf’ is R31,98/kg (the latest price I received) and your calf weighs 200kg, the animal is worth 200 x R31,98, which equals R6 396. If your lamb weighs 25kg and the latest price is R42,10/ kg, the animal is worth R1 052,50.
However, you need to understand that factors like breed type, or genetic traits like body shape or conformation, length or absence of wool, or poor quality of wool on lambs, can affect this price.
Animals that are in poor health or bodily condition, are infested with parasites, and even the distance from feedlots (this affects transportation costs) can also be factors resulting in you obtaining lower prices.
Consider this when calculating the value of slaughter livestock
Know the animal’s live weight: most auctions have digital scales that weigh livestock prior to selling, so you can see the live weight of your cow. If they don’t have a scale or a buyer comes without a scale, you should weigh the animals you want to sell beforehand or become trained in estimating their live weight. Without knowing the weight, you will struggle to calculate what a carcass should weigh after slaughter.
Estimate carcass weight: while you may not be spot on with your estimation, you can get quite close. The ideal fat grading of 2 and 3 for a cow or sheep should roughly lead to the animal slaughtering out 50% of its live weight. So, a C-grade or mature/older sheep that weighs 50kg should result in a carcass weight of 25kg, and a cow weighing 450kg should result in a carcass weight of 225kg. If the C-grade beef price is R43,50/kg, your cow is worth R9 787,50 (225 x R43,50).
Consider breed type, carcass confirmation, and fat grade: fat grading ranges from 0 to 6 (0 being emaciated or very lean and void of fat, while the 5 and 6 grades are considered by many as being too fat). The very lean grades (0 and 1) are priced way lower than earlier mentioned prices, and over-fat cattle or sheep may return in the range of R38/kg to R40/kg. Some butchers and abattoirs however like these very fat carcasses and may pay considerably more than the prices I’ve listed. Few markets will be prepared to negotiate on very lean carcasses because this meat isn’t attractive to consumers.
Understanding the variance in slaughter percentages: it’s important to understand that generally, meat-type animals or breeds of the 2 or 3 fat grades slaughter out about 50% of live weight; but very lean animals may slaughter out at a far lower percentage of between 35% and 38%.
So, a badly bred C-grade cow weighing 300kg, slaughtering out at 35% and returning R28/kg, is worth only R3 192. On the other hand, an over-fat cow of good breed quality weighing 700kg may slaughter out at 63% of its live weight and its carcass will thus weigh 441kg; at R40/kg, its value is R17 640.
