South Africa: Game Price Stampede

[AFRICAN INDABA]

South Africa: Game Price Stampede
by Stafford Thomas, Financial Mail, 16 August 2013

SA'S wildlife industry is seeing a boom in prices paid for superior breeding animals but it is a boom subject to deeply divided opinions among game experts Setting record prices has become the norm for SA's wildlife industry in its quest for the ultimate best of breed and big financial rewards. These high prices account for a large part of the sales at wildlife auctions rising from R60m in 2006 to R864m in 2012, a trend, game-breeding players predict will continue. At the forefront of soaring prices are what Wildlife Ranching SA (WRSA) terms "rare species". These include buffalo, sable antelope, roan antelope and Livingstone eland, which accounted for a combined R689m (80%) of sales in 2012. Average price rises since 2006 ranged from 270% for roan to 670% for buffalo.

The stakes are high. Annual returns on investment of 80% or more are feasible from top breeding animals, even assuming prices remain unchanged, says Norman Adami, SA Breweries executive chairman, game farmer and WRSA marketing director. Game breeder Bernard Groenewald sums up the sector's optimism. "There will be market fluctuations and prices will go up and down, but the bubble will never burst," Groenewald told delegates to the 2013 WRSA congress. "The high demand for superior genetics will always ensure a premium for top breeders." Adami adds: "Top-quality genetics command a high premium." Prices of top-quality breeding animals are around 30 times those of their standard counterparts and the gap is widening, he says. "The rise in prices is more than sustainable," says Jacques Malan, a game farmer and former WRSA president. Malan holds the record for the highest price yet obtained by a breeder: R26m for Horison, a buffalo bull. Sold in 2012 to a syndicate of three buyers, Horison smashed the previous record for a buffalo bull of R18m, set in 2011. He dwarfed the 2005 record of R165000. "They should make their money back [on Horison] in three years," says Gert Dry, a former WRSA president.

The goal is to breed animals with horn sizes sported by animals largely wiped out by indiscriminate hunting, primarily in the 19th century, says Neil Swart, a Vleissentraal game auctioneer. "Not long ago a sable bull with 34-inch horns was regarded as big," says Swart. "In 2012 we had the first 50-inch sable bull and it sold for R12,25m. This year we have two 50-inch sable bulls." The importance of horn size is evident in a record R1,65m for a nyala bull sold this year. It smashed the record, R83000, set in 2012, thanks to its horn length of almost 35 inches. "The previous record was 33 inches for a nyala shot in 2009," says Swart. Even Horison's record is on shaky ground. His horn spread (width) of almost 51,5 inches is not enough to match the 53 inches of a buffalo bull to be offered at the Thabo Thula auction later this year, says Swart.

Adami believes the focus on breeding the best specimens places SA in a powerful position in the global ecotourism market. "A growing middle class in the developed world and especially in developing markets will continue to create a growing demand for wildlife experiences," says Adami. "In turn, this will create demand for greater numbers of magnificent specimens of the rare African species." SA, he says, is uniquely positioned to support this demand. "It is because we run our ranches with increasingly superior animals from the most attractive species."

But not all wildlife experts are convinced rising prices for top breeding game are sustainable. "In the end it depends on what hunters are prepared to pay," says Peter Flack, a wildlife author, hunter, conservationist and trustee of the Southern Africa chapter of the World Wide Fund for Nature. Foreign and local hunters directly and indirectly generated R6,2bn in revenue in 2010, environmental affairs minister Edna Molewa noted in her 2013/2014 budget vote speech. Hunting, says Flack, is the backbone of SA's wildlife industry and underpinned its recovery from the brink of disaster 50 years ago, when there were just over 550000 head of game, including those in national and provincial parks. Today there are more than 18m head of game on more than 12000 game farms alone. "I can see a case for paying R1,65m for a nyala," says Flack. Nyala, together with roan and sable, is one of the "glamour" hunting species. "I am more concerned about buffalo prices," says Flack. "There are still a lot of places in Africa where they can be hunted. Prize buffalo are still readily available in other parts of Africa. Buffalo have not been shot out in Africa, nor have the body and horn sizes deteriorated."

SA-based International Council for Game & Wildlife Conservation (CIC) executive Gerhard Damm agrees. Posing a rhetorical question, he asks: "Why come to SA when you can hunt a trophy-size buffalo for US$20000 elsewhere in Africa?"

Subject of even hotter debate is a more recent addition of color variants to WRSA's list of rare species. Growing in number, they include black impala, gold wildebeest and king wildebeest. Prices are impressive. Topping the list is a king wildebeest sold for R5,1m, the fourth-highest price achieved at a game auction. In sixth position is a gold wildebeest, sold for more than R1,8m. Flack is not impressed. "They are creating brand new unnatural freaks," he says. "In my 53 years of hunting I have never heard of anyone who has seen one in the wild. It does nothing for game conservation."

Damm is also opposed to color variants. "It is like breeding new varieties of cattle or dogs," says Damm. "The CIC passed a resolution two years ago declaring color variants a manipulation of wild game that should not be hunted." There is another risk, warns Damm. "If color variants were to escape, it could have a serious impact on normal game," he says. The risk is now the subject of a study by the University of Stellenbosch, commissioned by the SA National Biodiversity Institute.

Adami springs to the defense of color variants. "Color variants are not freaks and are not bred through genetic engineering," he says. "White lion, for example, are found in the wild." Adami also believes if color variants were to mingle with normal colored game of the same species there would be no impact. This, he says, is because the gene producing color variants is a recessive gene. Malan is equally in favor of color variants. "We are not creating something new," says Malan. "In the old days [color variants] had no value and were shot out. This is why no-one has heard of them." In addition to white lion, he points to the rare king cheetah as another variant (in terms of markings) found in the wild. Where there is no controversy is the game industry's potential to help ensure food security. "SA is scratching the surface of its venison production potential," says Adami. "New Zealand produces 50 times as much venison as SA."

Based on a 2012 estimate by Camdeboo Meat Processors MD Piet Neethling, SA's venison market is worth just R300m-R400m annually while springbok, the primary venison export, earns SA a mere R60m-R70m. SA's imports of red and white meat are running at about R4bn/year.

Wildlife comes with a big advantage: it thrives in arid areas unsuitable for conventional stock farming. "Game farms occupy 20mha of previously unproductive land," says Adami. Springbok, impala and wildebeest are also prolific breeders. "Their numbers grow at between 25% and 35% annually," says Flack.

Venison production also holds great empowerment potential. "There is 12mha of overgrazed communal land that can be used for sustainable game farming," says Adami. Used productively, the land could support a big meat processing industry owned and run by rural communities, he adds. "The game industry's vision is totally aligned with government's growth strategy," says Adami. "There is no reason it cannot grow from being a R10bn/year industry into a R100bn/year industry."

 

[AFRICAN INDABA]

Peter Flack's Response to the Financial Mail Article

Peter Flack's Response to the Financial Mail Article
by Peter Flack, 23 August 2013

I refer to your article, Game price stampede, in the 15 August issue. While I have managed our family game ranch for 20 years and been a partner in a safari outfitter for 12, I have had no interest, direct or indirect, for the last three years in any game ranching or hunting operation, although I remain passionate about hunting and the conservation of our wildlife and wildlife habitats. The same cannot be said for Messrs. Adami, Malan, Grobbelaar and company, however, all of whom have vested interests in breeding and/or selling "wildlife" and whose statements in the above article are disingenuous at best and misleading at worst. In this regard, I advise as follows, namely:

1. The current market for intensively bred wild animals with very big horns and, more specifically, buffalo, sable, roan and Livingstone's eland, as well as unnatural color variants, has all the hallmarks of a pyramid scheme.

2. In other words, just like the tulip boom in Holland or the sour milk scheme in South Africa, when the number of breeders willing to pay these prices dries up, people will lose money, while those who set the ball rolling will have laughed all the way to the bank.

3. This may explain some of the rumors applicable to the huge auction prices being paid for some of these animals, for example, that in some cases money does not change hands and the bids are rigged to create interest in and demonstrate the worth of participating in these schemes. It may also explain unsubstantiated statements that an 80% return on investments is possible and that the high game prices are sustainable in this business. As the old axiom states, "When things sound too good to be true, they usually are."

4. These breeding schemes have nothing to do with "global eco-tourism" or "the growing demand for wildlife experiences." They are designed to attract trophy hunters. Quite simply, it is the price breeders believe that trophy hunters will pay to hunt these animals that underpins their schemes. And this is where they have within them the seeds of their own destruction.

5. Most overseas trophy hunters come from North America (and they are the ones, for the most part, who spend the money hunting trophy animals with big horns), as opposed to local hunters, the majority of whom are after meat. The Boone and Crockett Club is the most prestigious North American hunting and conservation association and does not allow any animal shot behind a high fence to be entered in its record book. Should a member be found to have done so, all his entries are expunged from the record book and he is disqualified as a member.

6. Increasingly, overseas trophy hunters are being influenced by this Club and others like it and want to experience a genuine, ethical hunt in the free range, wildlife habitat expanses of Africa and are reluctant to expose themselves to the ridicule of their peers and hunting associations by being involved, knowingly or unknowingly, in killing intensively bred, domesticated, once wild animals in "canned" or "put-and-take", small, high fenced enclosures, which is what many of these breeders and their clients offer because, having paid these huge sums (where they have, in fact, been paid), they cannot run the risk of leaving the animals free to roam and live a natural life where they feed themselves, reproduce naturally and can escape their predators.

7. Frequently the word, "rare" is used to describe these intensively bred animals. This is nonsense. Buffalo, sable, roan and eland can be found in numbers in the wild and/or on private game ranches in at least nine countries in Sub-Saharan Africa and every year new entries of these species are added to the top 100 in the major record books. In addition, as many hunters will confirm, while it is always satisfying to hunt a big, old, challenging male, out of the breeding cycle, with heavy and long horns, the overall hunting experience, if anything, is more important.

8. The competitive prices offered by safari outfitters in these various countries will limit the prices chargeable to end users here, namely, the hunters of these animals.

9. The increasing trend of deliberately breeding ever more unnatural color variants or freaks has no justification. It does absolutely nothing for the conservation of wildlife or wildlife habitats. To say that these animals existed in the wild but were shot out because they had no value, is beyond misleading. I do not know of anyone who has ever seen a gold wildebeest, black impala or yellow blesbok (to quote but three of the increasing number of freaks that are being artificially engineered), anywhere in the wild.

10. I do not know of any hunter who would want to hunt one of these domesticated freaks and I predict that other major hunting and conservation associations around the world will follow the lead of the prestigious European hunting and conservation association, CIC The International Council for Game and Wildlife Conservation who passed a resolution two years ago opposing, "artificial and unnatural manipulation of wild life"; excluding "all "trophies" of the animals so manipulated from being scored" and, "urging all CIC members to abstain from "hunting" manipulated animals." As this development spreads among hunting and conservation associations it will be the death knell for those hoping to profit from these schemes.

Lastly, the real threat posed by these breeders is to hunting in general in South Africa. If our country acquires the reputation of THE destination for "canned" and/or "put-and-take" hunting of domesticated wildlife and unnatural freaks, not only may record books create separate categories for, or refuse to register, game hunted here but many overseas recreational hunters will stay away for fear of being tainted. Together this will make us less marketable and put at risk a growing multi-billion rand industry providing tens of thousands of jobs primarily in rural areas.