Despite the difficult farming conditions, commercial farmers have managed to consistently produce exceptional cattle and meat. One of the reasons for this is the Namibia Agricultural Union (NAU) development of the Production Cost Index, which helps farmers keep track of profitability.

“The index is based on a basket of products for each farming-expense category. A weighting is allocated to each category based on its size relative to the total farming expenses of the average livestock farming enterprise in Namibia. The same is done for income, which is primarily based on the relative price of sheep and cattle over time,” reads the NAU quarterly report.

The report further states that relative cattle price consists of an appropriately weighted (in terms of marketing volumes) combination of the average weaner and average carcass price.

The Farmer’s Weekly in January 2016 reported that after appropriately weighing the expenses and income, these are indexed from a specific base year. It further stated that this allows for an effective comparison of changes from the base year onwards. Therefore, by using this Production

Cost Index, the cost-price squeeze phenomenon can be quantified and monitored over time.

Namibia’s success in beef production is also attributed to the fact that the country is sparsely populated, and has large areas of pastureland. Land remains fairly affordable and labour costs are comparatively low. This means it is cheaper for farmers to produce meat in Namibia than in many other countries.

Challenges to the livestock sector

Despite the benefits of farming livestock in Namibia, producers there have recently experienced a decline in profitability, largely due to high input costs.

Moreover, bush encroachment and the degradation of pastureland remain threats to profitable and sustainable beef production in the country.

Climate change and an increase in seasonal droughts, the latter resulting in a reduction in natural grazing, are also concerns for the long-term sustainability of the industry.

As land and fodder are essential to profitable beef production, according to a study by the US Department of Agriculture, meat-industry stakeholders are concerned about the threats being posed to Namibian farmers’ ability to feed their animals.

Another threat to the industry is the breakage and lack of maintenance of the veterinary cordon fence (VCF), which is particularly prone to breaches by large mammals, such as elephants.

The VCF is aimed at inhibiting the movement of cattle between the northern and southern parts of the country. By doing so, the Namibian government hopes to better control the spread of diseases such as foot-and-mouth disease (FMD). As seen in South Africa, FMD would likely lead to a ban or limitation of exports from Namibia.

Communal farmers face similar challenges, as well as the issue of limited access to market and better-quality breeding animals.