WIXLIB

OVERVIEW OF THE SOUTH AFRICANRED MEAT INDUSTRY1

HOW ARE SOUTH AFRICANINDUSTRIES PERFORMING ?2

BALANCE SHEET IN THE SOUTH AFRICANBEEF SECTOR ON PRODUCER LEVELSOUTH AFRICAN BEEFDomestic production792 095 tonsExports17 589 tonsPercentage of production5%South Africa is now a nett exporter with 2.8 nett2016 was the first year South Africa became a nett exporter of beefGross turnover of the SA cattle industry on producer level is R 44 000 000 000 per annumSOUTH AFRICAN SHEEP MEATDomestic production106 316 tonsImports11 000 tonsExports1 300 tonsExport as percentage of production1.2 %South Africa is a nett importer with 9.1 % nettSouth Africa remains a nett importer of sheep meatGross turnover of the sheep meat industry on producers' level is R 7 800 000 0003

BASIS OF SOUTH AFRICAN PRODUCTION /ESTIMATED LIVESTOCK NUMBERSOWNED BYALLEMERGINGPERCENTAGEOWNED BYEMERGINGSECTORCattle13.6 Million5.7 Million42 %Sheep24.6 Million3.1 Million13 %Goats5.9 Million4.3 Million73 %4

NUMBER OF HOUSEHOLDS OWNINGLIVESTOCK IN SOUTH AFRICATHE SOUTH AFRICAN EMERGENT SECTOR Households owningsheep 215 034 Households owninggoats 429 065 Income and Food Security5

ARE WE COMPETITIVE ? Animal Recording and improvement Reproduction efficiency Genetic improvement / Genomics–––––Resistance/ tolerance/Global WarmingSelection criteriaFertilityFee EfficiencyPolled Genes6

INDUSTRY STRUCTURESVALUE CHAIN APPROACH Red Meat Producers’ Organisation (RPO)National Emergent Red Meat Producers’ Organisation (NERPO)South African Feedlot Association (SAFA)Association of Meat Importers and Exporters (AMIE)Gauteng Meat Traders Employees Union (GMTEU)National Federation of Meat Traders (NMFT)Red Meat Abattoir Association (RMAA)South African Federation of Livestock Auctioneers (SAFLA)South African Meat Processors Association (SAMPA)South African National Consumers Union (SANCU)South African Pork Producers Organisation (SAPPO)South African Skins, Hides and Leather Council (SHALC)A single vision to take a desired future position !7

PRODUCER STRUCTURESTO HELP MANAGE THE WHOLE PROCESS:9 PROVINCIALRPO’STAU SANWGARPOAGRISASA STUDBOOKMPO /Agri InspecLRF(Federation forlivestockregistration)8

STRATEGIC INTERVENTIONS WITHSTATUTORY LEVIES IN THE FUTURECurrent FunctionsPlus: Animal Health Export Support Consumer Confidence- Additional voluntary grading systems9

South African Meat Consumption 2026 –versus 2014 – 2016 base periodSource: BFAP - Baseline10

DEMAND FOR RED MEAT IN AFRICA– At present 1.2 billion people; 15.5% of the world– Fastest population growth in the world– Estimation : more than double by 2050– By 2050 – more than 25% of world population will livein Africa– Food market in East and Southern Africa will morethan triple by 2040(The Modernizing African Food systems (MAFS) Consortium)11

DEMAND FOR RED MEAT GLOBALLY– Growth more slowly – BUT At present 7,25 billion people Another 750 million persons in nextdecade12

THE CONSUMERANIMAL PRODUCTS, QUALITY AND VALUE ADDING Product characteristicsGlobal and local decreases in fat content of meat observed over time13

THE CONSUMERMARKET DEVELOPMENT, CONSUMERISM AND TRADE14

THE CONSUMERMARKET DEVELOPMENT, CONSUMERISM AND TRADE Consumer more sophisticated Story food Consumers are skeptic towards the use of growthhormones, beta-agonists and antibiotics Free range / grain fed / grass fed 32 Brands that are audited15

WE HAVE:National Animal Health Forum & 9 ProvincialAnimal Health Forums Brucellosis Eradication Scheme PPR16

WE HAVE: Livestock genetic resources–Cattle breeds: Indigenous – 9(http://www.embryoplus.com/cattle sa indigenous.html) Other – 25 (BEEF BREEDING IN SOUTH AFRICA, 2nd Edition, 2010)–Sheep breeds: Indigenous – 12 (Snyman & Herselmann, 2011) Other – 12 (S Afr J Anim Sci, 1999)–Goat breeds: Indigenous – 4 (Cambell, 2003; ARC,http://www.arc.agric.za/home.asp?pid 2701) Large gene pool opportunity for adaptable livestock17

WE HAVE:A FOOT AND MOUTH DISEASE FREE ZONE R6 Billion per annum benefit18

WE HAVE:Veterinary Strategy19

WE HAVE:ONDERSTEPOORT BIOLOGICAL PRODUCTS:A STRATEGIC PARTNER Develop essential vaccines Unique vaccines for South African animal diseases Future – road ahead ?20

Independent Meat Inspection Scheme Red Meat Value Chain Round Table PHAKISA21

SAMIC – Classification System Classification is a pillar in the industry22

WE HAVE:A 40 % ad valorum tariff23

WE HAVE:A large percentage of the consumer rand24

WE HAVE:Self regulation Brine Injection Animal Feeds25

WE HAVE:CODES OF CONDUCT Animal Natural Resources Farm Laborers26

WE HAVE:CONSUMER EDUCATION PROGRAMMESBEEFSHEEP MEATWWW.COOKINGWITHLAMB.COMWWW.BEEFTALK.CO.ZA27

WE HAVE:PRODUCER COMMUNICATIONwww.rpo.co.zaRed Meat magazineSocial mediaElectronic newsletter28

WE HAVE:PRODUCER MANUALS29

WE HAVE:BEEF FUTURESLAMB CARCASS FUTURES30

WE HAVE:RED MEAT RESEARCH AND DEVELOPMENT S.A.Strategic Plan with Focus Areas: Sustainable natural resource utilisation Livestock production with global competitiveness Animal health and welfare Animal products - quality and safety, nutritional value and preference The economics of red meat consumption and production in South Africa Predation Management Livestock theft prevention R10 Million per annum 62 running projects31

WE HAVE:PROGRAMMES UNLOCKING THE POTENTIAL OF RED MEATCOMMERCIALISATION, TECHNOLOGY TRANSFER AND TRAINING Technology transfer and training / extension Mentorships Enterprise development32

Commercial ProducersLabourers on commercial farmersFeedlot IndustryEmerging Producer SectorFamilies Owning LivestockAbattoir IndustryLivestock AgentsTrade FormalTrade Informal / Street VendorsHides and Skins and Leather30 00060 0002 000250 0001 200 00010 0005 00010 00030 00010 000THE RED MEAT INDUSTRY IS MAKING ADIFFERENCE !!33

WE NEED:Livestock Identification and TraceabilitySystem S.A. (LITSA) A PPP between industry and Government34

WE NEED:DISASTER MANAGEMENT STRATEGY:PROVINCES ALREADY PROCLAIMED AS DROUGHT DISASTER IN 2015 / 2016LMP13 Nov2015NW24 Jul2015NCape29 Jan2016W CapePendingMP4 Dec205FS4 Sep2015KZN20Nov2015E Cape4 Dec201535

WE NEED:Percentage cows lost in the droughtProvince2013201420152016Free State10011110688North West100959679Limpopo1001009683KwaZulu Natal1001009688Eastern Cape100959387Northern Cape1001179377Western Cape1009810294Average1001029785Percentage ewes lost in the droughtProvince2013201420152016Free State100909090North West1001009999Limpopo10010514169KwaZulu Natal10010010064Eastern Cape1001019493Northern Cape1001019877Western Cape100101104100Average1001001038436

WE NEED:PREDATION MANAGEMENT Cost of predationR2.6 billion per annum in small stock , beef and wildlife industry ?37

WE NEED:PREDATION MANAGEMENT38

WE NEED:STOCK THEFT PREVENTION R900 million loss per annumAnimal ID / Brands / alternative methods of identification9 Provincial Stock Theft ForumsWWW.STOCKTHEFTPREVENT.CO.ZA39

WE NEED:SUSTAINABLE NATURAL RESOURCE UTILISATION Protection of the Environment––––Erosion preventionReclaim eroded and polluted resourceWater resources and qualityStrategy on global warming40

WE NEED:ANIMAL WELFARE The average city dweller’s interaction with an animal is with their pet they expect farmers to deal with livestock in the same wayCodes of Best Practice41

HOW DO WE PRODUCE MORE ?PRODUCTION DEVELOPMENT Better technology / managementGenomics ?Higher intensification / production systemsEnabling production environment / governmentCommercialization of emerging sectorGovernment’s capacity to render essential services –limited and still weakeningThe red meat industry to render services and to supportGovernment to render essential services42

The demand for South African red meat is growing nationally and internationally We must protect the Foot and Mouth Disease Free Zone at all costs The emerging sector is playing a major role in the supply chain but this must befurther developed 1,2 households owns livestock which play a major role in food and income security We are internationally competitive and can play a major role in growing the GDP andjob creation Producers are now realising between 50 % and 65 % of the consumer rand Beef price 34 %Lamb price 36 %Weaner price 101 %43

Motion of empathy for the farmers, farmworkers, their families and livestock inthe drought stricken areas !44

31 WE HAVE: RED MEAT RESEARCH AND DEVELOPMENT S.A. Strategic Plan with Focus Areas: Sustainable natural resource utilisation Livestock production with global competitiveness Animal health and welfare Animal products - quality and safety, nutritional value and preference The economics of red meat consumption and production in South Africa Predation Management