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SIMON BROWN: I’m chatting now with Roelie van Reenen. He is the supply chain executive at the Beefmaster Group. Roelie, I appreciate the early morning.
Looking back first at last year, 2023, one of the big challenges for the beef industry – [there were] a lot – was certainly foot-and-mouth disease. How is that being contained as we move into 2024? That largely is sort of something we can leave behind in last year.
ROELIE VAN REENEN: Good morning, Simon. Thank you very much for the opportunity. The sun’s been up for quite some time, so it’s not that early yet. I don’t know where you live.
Simon, yes, 2023 has indeed been one of the roughest that I’ve seen in my short life. The true effects of the 2022 foot-and-mouth outbreak we actually saw in ’23, with most of the price declines and the loss of markets and the true effect of that. Now you’re talking about containment. It has been very quiet, and very positive that this disease and the outbreak is being thoroughly contained at this point in time.
We would like to see more of the areas being lifted from the ban. It is evident in the report from the government that there are still some areas being contained.
Looking forward from there, the government has done very well in negotiation with the China agreement in that we have basically been able to compartmentalise, and from there we are looking forward to exports in 2024. Hopefully they will commence soon.
That being said, we have received some news on movement on the Saudi agreement, which is also quite positive. We’re looking forward to that also happening soon, within the next six months.
Roelie van Reenen of Beefmaster Group. Image: Supplied.
SIMON BROWN: Saudi Arabia – that you put out late last year – hasn’t been buying beef from us in 21 years. That’s going to be significant, getting exports. Way back in the day we were an importer of beef; now we are an exporter and new markets give us great opportunity.
ROELIE VAN REENEN: Correct. We’ve moved from being a net importer to a net exporter, which means we produce too much beef for this country to consume which is great for farmers. And it’s great for our industry that we are able to up our production to such an extent that we actually have to export. That being so, we need those markets. We need good markets.
Unfortunately, China is in a bit of a recess at this point in time. That economy is not too strong. The people do have a few problems. We saw that with products like lucerne, for instance, where the dairy industry in China is under strain and they’re not taking the lucerne that they did in 2020 and ’23.
Now if we look at Saudi, it’s been 21 years. For me that’s a new market. It’s a new playing field and we are very excited, given that the Saudi economy is so strong at this point in time [with] all the development that they are planning. We see that every day, and what they’re trying to build in that country is totally amazing. So that is a true opportunity for us to expand thoroughly.
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SIMON BROWN: We’ve got war in the Middle East, we’ve got war in Ukraine, where those markets that we were selling to are now, I suppose, problematic. War is not good for demand or logistics at all.
ROELIE VAN REENEN: Yes, that is very true. The tourist industry in the Middle East has been strained due to those wars. We’ve also had problems with shipping, whereby [in] supporting countries like Yemen, for instance, it was about the bombing of the ships with the drugs.
Now obviously if you have to send product into that area that is a bit problematic. If those ships turn around with a product that is perishable it creates logistical issues. But we’re managing around that and I’m sure it’s not something that cannot be overcome at this point in time.
SIMON BROWN: You mentioned that, logistics. Obviously, we’ve got the issues at the ports. I mentioned that in my intro to this morning’s show. We’ve also got the Eskom challenge, and I think a lot of folks are like, ‘Come and beef farm’. Cows just wander around and eat, but it’s abattoirs. There is a demand there. You do need power and of course load shedding is not helping the industry at all.
ROELIE VAN REENEN: Yes. Maybe we have become so used to managing all these extreme difficulties that we don’t really notice that anymore, like the load shedding. Kimberley Municipality has had water issues. We’ve struggled around that. So it is definitely not an easy playing field at this point in time. But, like I said, we might just not be noticing all of these things anymore.
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SIMON BROWN: I have always said farming’s the toughest thing, so probably ‘a little more tough’ is not fun but something that comes with the terrain.
If we look forward to 2024, there’s a lot there to be positive around. You mentioned those new export markets coming up. Locally hopefully [for] a consumer who’s been under severe pressure and, I imagine, cutting back on their protein simply because of budget constraints, we could see that easing up. Are you, I suppose, cautiously optimistic going into the year?
ROELIE VAN REENEN: Yes, cautiously optimistic. Going into 2024 we need to keep the belts tight. My father taught me that. But the fact is that it is unsure. It’s uncharted waters. We don’t really know. Keep the belt tight. Let’s manage through this one. If it goes well, it’s going to go very well. If it doesn’t go well, we are going to manage to do that once again.
Now, if we look at the broader spectrum in the agricultural sector for ’24, yes, there are some concerns about El Niño and that we’re looking at a dry year.
Fortunately, we’ve been blessed with good rain over this Christmas period, which is very positive. And from what I understand most of the harvests are in, and for us, as a beef industry, the harvest is a base commodity and we need that product. So we’re very positive that that looks pretty good at this point in time.
As for beef, we are looking forward to a good year. That is possible. Unfortunately, we have seen a lot of the industry being under such strain and there has been some downsizing in certain parts of our industry. That is concerning, but it’ll also create opportunities for new role-players to participate in the market.
SIMON BROWN: I take your point. A tough period and some folks just cut back; truthfully some probably don’t even make it.
We’ll leave it there. Roelie van Reenen, supply chain executive at Beefmaster Group, I appreciate your time.
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