The Sunday News
Mhlupeki Dube Farming Issues
ONE question that has continuously dogged my mind with respect to beef prices is why are the price changes felt only by the producers and not the consumers? Cattle prices are one of the most fluctuating commodity prices. The prices can reach as high as $4,20/kilogramme for a super grade carcass and plunge to as low $3,50/kg for the same grade of beef.
In live weight basis beef prices can go as high as $1,50/kg and drop to less than a dollar per kilogramme.
While the common explanation that is advanced is that of market forces at play something does not wash when one looks at the entire value chain.
This pen fully understands the interaction between supply and demand having had adequate schooling in that subject but still cannot explain why beef producer prices will take a huge nosedive from January up to now but this fails to translate into a meaningful and visible price drop at the consumer end of the value chain.
Maybe I buy beef from wrong butcheries but I have never gotten into a butchery and noticed that the prices have come down due to a general drop in the market of the beef producer prices.
Put simply my question is why do prices only drop when cattle buyers are buying from farmers and the price drop is not reflected in butcheries?
Is this a result of genuine market forces at play or it is the evil forces within the livestock value chain that are merely siphoning farmers from the jugular?
One cannot help notice the uncomfortable but telling coincidence that livestock prices always take a dive when big players are shopping.
In other words when big boys in the livestock industry go out, buying prices miraculous go down to ridiculous levels.
They are out buying from January up to the end of April. Yes, when your animals are in peak shape and condition that’s when they go shopping and that’s when prices tumble.
Come dry season the big boys are not buying anymore, they are taking from their paddocks pushing through their abattoirs and selling to consumers via their butcheries and guess what the beef prices suddenly firm to lucrative levels. In Mzwakhe Mbuli’s words is it a matter of accident, coincidence or by design?
This column has no intention of being reduced into vituperation platform against big players within the livestock value chain but it cannot resist asking questions on pertinent livestock matters.
Market forces of supply and demand are as old as marketing itself and have been tolerated and appreciated by both producers and consumers but what cannot be appreciated is a few powerful players within the value chain holding the whole nation to ransom by manipulating the whole value chain and subsequently prices to their interests.
We begin to ask questions around the wisdom of allowing the same player to participate in all the stages of the value chain.
You are the farmer, you own an abattoir and you have a chain of butcheries. How are the prices regulated where you are the player, the coach and the referee?
Is it not time Government through the Agricultural Marketing Authority (AMA) begins to regulate such defacto monopolies so that consumers and producers are not fleeced and eviscerated by ruthless players with uncouth business ethics.
In my books it will not be in bad taste at all if players are restricted to at least one or two stages of the livestock value chain.
This will eliminate adulteration of the value chain by multiple stage players. Let us all enjoy our share of the value chain, if prices drop because it’s time for their annual plunge let that happen for all of us consumers included because when they do firm they always firm for all of us!
Feedback [email protected] <mailto:[email protected]> cell 0772851275
