Written by PJ, from VELD FIRST, KAROO DIREK, DIE VEEPOS and KAROO-KALAHARI VEEVOER & LOGISTIEK
Inflation, interest rates, weak currency, fuel and energy prices, production input costs, weak consumer demand, government pressure, theft and vermin, and so the list of stressors on agriculture grows.
What should you as a livestock farmer be considering as a ‘Plan of Action’ over the coming months?
1. Ruthless herd/flock management and culling
- Aggressive culling: immediately identify and cull non-productive, late-calving, or aged cows and ewes. Freeing up grazing and feed resources for your top-performing animals reduces overall input costs.
- Early weaning: consider early weaning for calves and lambs if veld conditions are under pressure. This reduces the nutritional requirements of the breeding herd, allowing them to maintain body condition cheaply on veld.
- Strict performance testing: keep accurate records of feed-conversion ratios. If an animal is an inefficient converter, market it before it consumes any more high-cost inputs.
2. Radical transport, energy and logistics efficiency
- Shared logistics: group your transport loads with neighbouring farmers to ensure every double-decker truck or trailer leaving the district is at 100% capacity. Empty or half-full transport is a financial leak.
- Direct-to-abattoir marketing: cut out unnecessary intermediaries where possible. Transporting livestock multiple times (e.g., from farm to auction, then auction to feedlot) multiplies the diesel tax. Seek direct supply contracts with local abattoirs or independent butcheries to capture more of the value chain.
- Strategic weighing: only transport animals that have strictly reached their optimal target market weight. Shipping under-weight animals means you are paying the same high freight cost for fewer marketable kilograms.
3. Smart feed, veld and agronomy adjustments
- Maximize veld utilisation: optimize your rotational grazing systems (like high-density strip grazing) to extract maximum nutritional value from your natural pastures. Free veld must replace bought-in feed wherever possible.
- On-farm feed processing: if you mix your own feed, consolidate milling schedules. Run your diesel-powered hammer mills or tractors continuously for full-day blocks rather than turning them on and off multiple times a week.
- Precision supplementation: do not cut out licks completely, as this ruins reproduction rates, but target them precisely. Use production licks strictly for high-priority animals (e.g., weaners or heavily pregnant ewes) and maintenance licks for the rest.
4. Cash flow and financial fortification
- Fix energy costs: with diesel at record highs, look at the business case for migrating water-pumping infrastructure to solar. Livestock watering is a daily, predictable energy cost that can be permanently taken off the diesel bill.
- Reduce debt burden: pay down debt so as to reduce interest payments.
- Build cash reserves now: use the seasonal year-end uptick in meat demand to sell off non-core stock and build a cash buffer. Do not reinvest heavily in speculative expansion until energy volatility stabilizes.
- Review forward contracts: speak with feed suppliers to lock in grain or silage prices early if they offer favourable terms, capitalizing on the current strong La Niña crop yields before transport inflation drives bulk feed prices up.
Contact PJ at 072 073 6805
Feature photo: Aydın Photography on Pexels
