Dr Frikkie Maré, Senior Lecturer in the
Department of Agricultural Economics at the University of the Free State (UFS), says lucrative trade opportunities do exist for the South African red-meat industry that is thinking about exporting to international markets.
He, however, believes that there are some important aspects that red-meat producers should consider in order to fully benefit from these opportunities. There are also a number of requirements that producers must identify and then consistently meet in order not to incur considerable financial losses.
Dr Maré, who has in-depth knowledge of the red-meat value chain, delivered a presentation at the
2020 LRF Stockman School, speaking about international markets and international market requirements.
An exporter’s knowledge and understanding of the red-meat trade in terms of fresh and frozen products is important. Dr Maré says that although South Africa is a net importer of bovine meat, there is still opportunity to increase our export thereof, as our high-quality meat is in demand; we can make up the difference by importing meat of lower quality. “With the oversupply of bovine meat, it will also make sense to increase the export of bovine meat,” he says.
Making it profitableRed-meat producers need to know why they want to export. Dr Maré says that export markets can offer price premiums compared to the less attractive prices received in a domestic market. “However, it is key for red-meat exporters in South Africa to differentiate between working to export to targeted premium-priced markets versus getting rid of excess production.”
“The national animal health status, due to the foot-and-mouth disease outbreaks, does however limit our access to premium-priced markets,” he adds.
It is also important for products to be competitive in terms of either price or quality, and Dr Maré believes that South Africa can be very competitive if one looks at our average red-meat prices compared to the premium-priced export markets, of which some borders are closed to red-meat exports from South Africa. “In countries where the borders are open to export from South Africa, there is an opportunity to sell our red meat at a premium if the quality is better than consumers in those countries are used to. Still, quality and availability must be consistent and reliable if we want to export to these countries,” says Dr Maré.
When considering export, the type of product required by an export market needs to be given thought. These markets are particular about whether the meat is from grain- or grass-fed animals, the fat content of the meat, whether it is safe to eat, whether it was produced conventionally, naturally, or organically, and whether the meat should arrive frozen or chilled.
The market and your productDr Maré states that South African exporters of red meat can learn a lot from the Australian red-meat industry in terms of using packaging to differentiate their products from others. “If South Africa starts doing the same with the packaging of its red-meat exports, these products will start to be perceived as special by consumers in export markets, who may then be prepared to pay more for them as a result,” he says.
For both beef and mutton, international consumers indicated the importance of packaging information featuring a picture of what type of animal the meat came from, including the price per kilogram, price per pack, whether or not the meat is naturally produced, whether or not it has a quality grading/product guarantee, and the colour of the meat.
“Constant market research ensures that Australia’s red-meat exports are exactly what consumers in these countries want and can afford. This research also keeps Australia’s red-meat industry informed of whether or not it is profitable for the industry to keep exporting to a particular country,” he says.
In terms of market research, data on aspects such as the population, household number by disposable income, meat consumption per capita, and the amount spend on groceries, is also valuable.
For example, it was found that in Japan, consumers buy according to their family’s preferences, what they find easy to prepare, what they believe are healthy for their children, and what they can use in a number of different meals.
Relationship with your buyer“It is vital for exporters in the South African red-meat industry to gain the trust of trade partners in the export market, and to understand – and meet – the needs of consumers in that particular market,” says Dr Maré.
Additionally, Dr Maré is convinced that good relationships between the South African producers, government, and the governments of our red-meat export markets are crucial to sustain exports. “To assure these governments of the safety of our red-meat products, the South African government and red-meat sector must work together and improve on-farm and national biosecurity. Implementing an effective and efficient traceability system in our country’s national and international red-meat value chain is also needed,” he says.
Dr Maré says that whatever actions is taken by an exporter in the red-meat industry, it needs to be sustainable. “Should you fail, you will hurt the industry.”