Breeders sink teeth into profits
Game Farming | Returns can be astonishing, but beware the unscrupulous dealers out there, writes Tina Weavind
WANT to beat the stock market? Get into game breeding. Specifically, breed something rare such as sable antelope, diseasefree buffalo or antelope with unusual colouring.
In the past five years, the selling price of sable antelope and healthy buffalo has grown by as much as 479% and 540% respectively. The JSE All Share index crawled up 121% in the same period.
The catch, however, is that it is a lot easier to get into the stock market — just go to any number of online brokerages and put down a few hundred rands.
But with game farming, the barriers to entry are colossal.
Johan Rabie, biochemist, Harvard MBA graduate and game
DNA testing and parent verification have taken off in the industry
breeder for the past 12 years, says you need about R20-million if you decide to breed sable antelope and disease-free buffalo.
A 500ha property — the smallest farm you can have for buffalo and sable — would set you back R7-million to R8-million and the fences and other infrastructure another R2-million.
A good start would be one buffalo bull and nine females, but a quality breeding herd costs about R9 million. Then there is the R4-million to R5million needed to buy a breeding herd of sable antelope.
There are ways around this problem, and one of the increasingly common solutions is for people to buy a stake in an animal. It is a lot less financially onerous getting into the market for colour variants. You can get the necessary approval to keep antelope the size of impala and wildebeest on a property as small as 50ha, so you can have one foot in the city and one on your weekend game farm.
But it is the inexperienced weekend game farmer who seems most likely to lose his shirt — unless he is getting expert advice.
And, warned Herman Barnard, manager of Wildlife Ranching SA: “There are a lot of skelms [crooks].”
Even South Africa’s deputy president is involved in game ranching. Cyril Ramaphosa owns Phala Phala Wildlife, a 2 500ha reserve west of BelaBela where his manager, David Freeburn, oversees the breeding of rare game.
Of course, this is not necessarily a vote of confidence. Remember Ramaphosa’s spectacular faux pas when he bid R18-million for a buffalo cow and her calf? He dropped out of that particular bidding war, but spent R15-million at the same auction on other animals.
Would-be game farmers need inside knowledge of the best breeding practices on various farms and the lineage and quality of their stock. Then there is the ability to distinguish a great specimen from a good one.
Even spotting the genuine ar- ticle can be useful. Last year, one aspiring — but inexperienced — farmer handed over several hundred thousand rands for a few black impala. A few days later it rained and the paint washed off.
Crooked dealers have also been known to lie about an animal’s lineage and so, not surprisingly, DNA testing and par- ent verification have also taken off in the industry.
A top-quality black impala ram can sell for an eye-popping R500 000. The average prices at auction for these animals increased from R102 000 in 2010 to R194 000 in 2012.
Two years ago, a golden wildebeest was sold for a record R1.4-million, about three times the usual price of R514 000. In 2010, however, wildebeest prices averaged R263 000.
Colour variants are much faster to replicate than breeding a quality African buffalo or sable antelope. The gene for colour variance is recessive and it takes a few generations to increase your chances of getting the right look. But once you have the optimal gene pool, your numbers increase exponentially. But there are a lot of people vehemently against this kind of breeding.
Ken Maud, a businessman turned conservationist, believes these animals have “genetic deficiencies” and would normally be targeted by predators.
Rabie disagrees: “These are not man-made gimmicks. They occur naturally, but because the genes responsible for the unusual colour are recessive, they are seldom found in nature.”
“Yes,” said Maud, “but they are found in small numbers for good reason.”
He believes the exotic game industry is a disaster waiting to happen and an investment bub- ble waiting to pop.
Supply had far outstripped demand, said Maud, and referred to the theory that the industry kept prices at “insane” levels by breeders bidding “up” their own animals and then publicising the gigantic piles of cash being handed over.
Well, allegedly handed over. Another rumour doing the rounds is that the “buyers” are often just a friend doing the breeder a “favour” — and no money actually changes hands.
The breeders, buyers and middlemen disagree. “I’ve heard the rumour, but there’s no basis for it whatsoever,” said one insider, who asked not to be named.
Still, looking at the industry objectively, these kind of mammoth returns look too good to be true. However, there are about 10 000 private reserves in South Africa and a new one is registered just about every day. They all need to be stocked with animals.
Rabie said in 2004 he had a choice: breed cattle or game. It did not take long for him to work out which would make the most money — even a decade ago,
A top-quality black impala ram can sell for an eye-popping R500 000
prices were rising steadily.
So Rabie bought 34 quality buffalo heifers for R120 000 each, the same it would have cost to buy 600 beef cows. He gnawed at his nails for a while, but was vindicated within a few years. Now, few of his animals are worth less than R500 000 and he has far more now than he had then. Cattle, on the other hand, are still trading at pretty much the same prices they were 10 years ago: R10 000 to R15 000.
Barclays Africa’s head of agribusiness, Ernst Janovsky, said the bank was “quite excited” about the game industry.
“Part of the reason is that hunting has been banned in traditional destinations like Kenya, Tanzania and Botswana, and so demand has soared in South Africa. Wherever the ban has been implemented, the game dwindles because it has no value,” he said.
Conversely, game numbers in South Africa are soaring and Janovsky sees a likely upward trend in value in the foreseeable future.