ECONOMIC TRENDS AND OPPORTUNITIES IN THE LITTLE KAROO.
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1 ECONOMIC TRENDS AND OPPORTUNITIES IN THE LITTLE KAROO. OUDTSHOORN Willem Burger 14 March 2017
2 INTRODUCTION OF THE ECONOMY OF THE LITTLE KAROO Poor performance of Primary Agriculture within Economy of Little Karoo Global Economy Scene South Africa issues Volatility of exchange rate Drought Specific Issues regarding Ostrich Industry EU Regulations Avian Influenza High Feed cost 2
3 CONTENT Little Karoo Information Agricultural Industry in the Little Karoo Ostrich Industry Conclusion Acknowledgements 3
4 INLEIDING LITTLE KAROO INFORMATION Go to Insert > Header & Footer > Enter presentation name into footer field 4
5 GDP Growth Rate 7 GDP Growth Rate per annum (%) WC Eden Oudtshoorn Kannaland Expansion Recession Recovery Oudtshoorn & Kannaland growth rate declined from 2000 Agriculture major contributor 5
6 Sectoral Growth Sectoral Growth Agricultural, Forestry and Fishing Manufacturing 10 Construction Commercial Services General government and Community, Social and personal Services Other 0-2 Eden Oudtshoorn Kannaland Total Low growth of Agriculture Biggest growth was Manufacturing & Commercial Services Les diversified than other Areas 6
7 Sectoral Composition % 90% 80% 70% 60% 50% 40% 30% 20% 10% % Sectoral composition 2013 (GDP) General Government Community, social and personal services Finance, insurance, real estate and business services Transport, Storage and communication Wholesale and retail trade, catering and accommodation Construction Electricity and Water Manufacturing Mining and Quarrying 0% Eden Oudtshoorn Kannaland Agricultural Forestry Low Contribution Of Agriculture Services supporting Agriculture 7
8 Net Employment per sector Net Employment Agricultural, Forestry and Fishing Manufacturing 5000 Construction Eden Commercial Services General government and Community, Social and personal Services Other Most Job Losses in Agriculture 8
9 Net Employment per sector Net Employment Agricultural, Forestry and Fishing 1500 Manufacturing Construction 0 Oudtshoorn Kannaland Commercial Services General government and Community, Social and personal Services Other Most Job Losses in Agriculture Skilled Labour vs Unskilled Labour 9
10 Employment per sector Employment per sector % 90% 80% 70% 60% 50% 40% 30% 20% Other General government and community, social and personal services Commercial Services Construction Manufacturing 10% 0% Eden Oudtshoorn Kannaland Agriculture, Forestry and Fishing Agriculture Still Major Employer Especially unskilled Labour 10
11 INLEIDING AGRICULTURE INFORMATION Go to Insert > Header & Footer > Enter presentation name into footer field 11
12 Agricultural Production in Little Karoo 2013 Long Term crops, 10% Seed, 4% Other, 2% Lusern & Pastures, 84% 50859,82 Ha under cultivation Area under Tree Nuts is expanding Potential for Citrus Water availability and security limits long term crops 12
13 INLEIDING OSTRICH INDUSTRY INFORMATION Go to Insert > Header & Footer > Enter presentation name into footer field 13
14 Ostrich Production Within South Africa and Eden District Vrystaat, 1.9% Northen Cape, 6.0% Registered Farms Limpopo, 0.5% Ostrich Farming within Western Cape Eastern Cape, 12.1% Western Cape, 79.6% Areas of Ostrich Farming % of total Farming Area per Municipal Area Kannaland George Kannaland, 5% George, 6% Biggest Area for Ostrich farming within Oudtshoorn & Mossel Bay Drier and Hotter Climatic Conditions Hessequa Mossel Bay Oudtshoorn Hessequa, 8% Mossel Bay, 10% Oudtshoor n, 13% 0% 2% 4% 6% 8% 10% 12% 14% Areas of Ostrich Farming % of total Farming Area 14
15 Ostrich production systems Mixed Farming: Lusern Vegetable Seed Stone Fruit Small Stock Wine Grapes Other Ostrich Feed pens & Feed Lots 15
16 Ostrich Numbers at different age groups and times of the year 200, , , , , ,000 80,000 60,000 40,000 20,000 0 Wyfies 1 dag - 6wke 7wke - 4mnde 5mnde & ouer 16-Jun Jun Jun Since 2014 a decline in Day Old to 6 Weeks. 120, ,000 80,000 60,000 40,000 20,000 Decline in Female numbers 0 Wyfies 1 dag - 6wke 7wke - 4mnde 5mnde & ouer Des-16 Des-15 Des-14 Des-13 16
17 Day Old Movement Numbers & Next Year Slaughter Numbers 01/07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ % 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Decline in Numbers Slaughtered More Day Old chicks taken through to slaughter Next Year Slaughter Numbers % Slaugherd Last few Years Numbers slaughtered stabilised Day Old Chick Movements Slaugter Figures 17
18 Kilogram Heat Treated & Fresh/Freezed Meat exported Heat Treated Meat Fresh & Freezed Meat Since end of 2015 there is an increase in Fresh/Freezed meat exported. Western Cape provides 76% of the annual meat exports (Eden district 95,3%) 18
19 Influence of Meat Price and Quality of skins on Income Meat Income per Slaughter bird % 1st & Premium Skins Feather Income R 640 Fresh/Freezed export R 300 difference Production Cost, Feedlot R4470 Production Cost, Low cost feeding R
20 Influence of Exchange Rate ($) R R R R R R R R R R R R R R 3.05 R R R R R15,00 R3 591 R16,00 R
21 Ostrich Farming CONSTRAINTS: Impact of Rand Exchange rate on Profit Increase Environmental Awareness (Veldt Management) NEMA Regulations (2014) New Market Penetration Guarantees on animal welfare & Food Safety Consistent & quality supply High abattoir and Tannery standard compliance Phyto sanitary requirements of the EU Capital intensive & High risk High Chick Mortality Avian Influenza Market uncertainty Water Security 21
22 Ostrich Farming OPPORTUNITIES: Still nett exporter of ostrich meat An extensive range of value adding: Other ostrich meat products Leather Feather Eggs for craft market & tourism Pet Food Fat (extracted oil for cosmetic market) Ostrich Show Farms 22
23 Conclusion Water Security Drives Agricultural performance of the Little Karoo Move towards high income long term crops: Tree nuts, Stone & pome fruit, vineyards Agriculture production diversified and integrated with Ostrich farming High Feed cost of Slaughter bird production Lowering feed cost More emphasis on improving Quality of skins. 23
24 Acknowledgements Lindy Langenhoven - STATSSA KKI Dr Adriaan Olivier Ostrich Business Chamber Piet Kleyn Prof Theo Kleynhans US Joye Potgieter 24
25 Thank you
26 Contact Us Willem Burger Farmer Support and Development Tel: +27 (0) Fax: +27 (0)
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