Raising The Steaks: Africa’s booming meat industry

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Located in the undulating hills south of the Suikerbosrand mountain reserve near Johannesburg, Karan Beef’s vast cattle facility is the largest of its kind in a country where red-meat consumption is a way of life.

At the 2,330 hectare Heidelberg estate, young calves between seven and 12 months are purchased from breeders, placed in pens of up to 120 animals, and weaned on starter rations and feed from an on-site mill capable of producing up to 1,740 tons per day.

Some 150,000 head of cattle at any one time are fed and watered in this system, bulking them up for the short final journey to the Karan-owned abattoir at nearby Balfour, where their carcasses are processed and dispatched to freezer storage in Johannesburg for onwards sale.

Emerging from humble origins – Karan’s herd totalled less than 100 in 1974 – the firm has expanded to become a fully integrated operation attracting major investment.

In 2018, South Africa’s state-owned Public Investment Corporation and Pelo Agricultural Ventures, a black economic empowerment group, agreed to pay up to $365m for a majority stake in the company.

Previously content to wean cattle for local enthusiasts of the braai – the red-meat dominated South African barbecue – producers like Karan Beef now lead a red meat industry with some R70bn ($4.9bn) a year in turnover and huge export potential.

“You will find that we are very competitive on the commercial side in terms of beef production,” says Gerhard Schutte, chief executive of South Africa’s Red Meat Producers Organisation.

“About 80% of all our beef is finished up in feedlots. Our industry is quite young compared to the Australian and US feedlot industry.

“We are quite high tech because we started later and could implement what we learned on an international basis.”

That embrace of technology is helping South African producers respond to a huge increase in demand for meat across Africa that is expected to stretch well into the future.

With Africa’s population projected to more than double by the middle of the century to 2.5bn and GDP per capita on the continent expected to continue rising, meat consumption will become affordable to millions of Africans for the first time.

The United Nations Food and Agriculture Organisation (FAO) estimates that the consumption of beef on the continent will increase 200% between 2015 and 2050, while poultry consumption will grow by 211% and pork by 200%.

Opportunities for investment are likely to prove more attractive in Africa than other global regions, according to the organisation, with future investments required across the value chain in poultry and pork facilities, abattoirs, feed production, transport and equipment supply.

And yet despite the huge potential of the meat market, the rapid increase in demand poses a series of challenges for Africa’s relatively young and underdeveloped industry.

While industrial-scale producers like Karan offer a compelling vision of the future, the majority of African livestock are raised in very different conditions, often in inefficient, unproductive smallholder environments isolated from markets and abattoirs by limited infrastructure.

Weaned on ineffective feed and with poor disease resistance and limited veterinary care, many animals fail to yield their true economic or nutritious value.

Meanwhile, the increasing global awareness of the environmental costs of meat production – particularly by methane emitting cattle and other ruminants – raises the question of whether large-scale livestock farming poses risks for Africa.

Given these challenges, Africa will struggle to satisfy its bulging appetite for meat without resorting to expensive imports, according to experts.

“I think it can be said that demand for animal sourced foods will increase considerably over the coming decades driven by population growth, urbanisation and increasing incomes,” says Jimmy Smith, director general of the Nairobi-based International Livestock Research Institute (ILRI).

“The question is whether that is going to be met by importation.

“If you look at the projections, Africa’s food bill will be about $125bn by 2025/30. A third of that [comprised of animal-sourced foods] is going to be a huge bill with tremendous opportunity costs.”

For Africa’s policymakers, the question will be how to nurture a shift to more efficient modes of production to meet demand and encourage exports while protecting the environment and improving the lot of smallholder farmers.

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