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Buying and selling wild animals: Part 1

4 August 2015

 

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www.leopard.tvThe live wildlife being sold on auctions show a continual change in the type of animals entering the market, with increasing numbers of rare animals and exotic colour and morphological variants entering the market recently. This has created a record turnover of R1 875 133 871 for 29 281 animals sold in 2014. Of these sales, most of the animals were sold on catalogue and boma auctions. However, it is estimated that these wildlife auctions only represent some 20 per cent of all the wild animals being sold, with the rest sold privately.

Live wild animals for sale can be marketed in various ways, two of which are internet and catalogue auctions by the owner who contracts the services of a professional wild animal capture team, or captures the animals himself through a passive capture system. Developments in computer software has also enabled auctioneers to transmit the proceedings of boma and catalogues auctions live on the internet. The licence for the software is owned by WildlifeAuctions.

For live wildlife auctions the nominal mean price per animal is usually indicated. A nominal price is the current price in rand, but to determine the real price the nominal price has to be adjusted with the consumer price index for price level changes over time due to inflation or deflation. This requires dividing the mean nominal price by the consumer price index in decimal form.

The mean prices per animal and the annual turnover vary with the supply and demand of various types of wildlife. At the start of the wildlife ranching industry, expansion was rapid and the demand appeared to be insatiable. With time, an exaggerated image of prices for live wild animals developed because some exceptional prices were paid for rare animals, including colour and morphological variants. Moreover, there are continued efforts by wildlife producers to improve the quality of their local and imported animals, which has resulted in a structural change in the wildlife industry. Yet the prices of the majority and more readily available wild animals have remained less exceptional.

The turnover at wildlife auctions since 1991 reflects fluctuations in the mean prices being paid for various types of wildlife. The increased availability of rare animals,   colour and morphological variants on wildlife auctions, the structural change in terms of a stud breeding as opposed to a free-range commercial and conservation approach, and a new increased demand for large-herd, meat-producing animals have all influenced the mean price trends. Moreover, an increase in both the value and the number of rare animals, colour and morphological variants that became available on the market in recent years have led to a sharp increase in the auction turnover in 2014. The fluctuation in the number of animals being sold on auction compared with the increased turnover is especially an indication of the contribution that is being made by rare animals such as the white rhinoceros, African savanna buffalo, sable antelope and roan antelope; and the various colour and morphological variants.

he sharp increase in turnover from 2010 is partly due to various factors such as the weakening of the rand, the breeding of colour and morphological variants and new entrants to the wildlife industry which stimulated demand, the emergence of stud breeders and exorbitant prices for exceptional animals. However, variations occurred in all types of wildlife.

Taking the mean real price trend for the springbok as an example, a significant increase in price occurred from the early to late 1990s and again from 2010 to 2014, but from 1998 to 2009, the prices for the springbok stagnated. This stagnation of price does not imply that mean prices did not increase but rather that the increase in the nominal price was lower than the rate of inflation. As a result, the buying power that was realized from selling a springbok on auction did not change significantly from 1998 to 2009. Therefore, the size of a bundle of goods that could be bought with the money received for a springbok in 2009 was less than in 1998.

A similar trend occurred in the agricultural sector (livestock and crops), with input inflation surpassing output inflation or the growth in output prices. Unfortunately, the result of this trend in the wildlife industry was a smaller profit margin and subsequent higher economic pressure. The most important factors that influenced the prices for all the common, large-herd, meat-producing animals negatively was an overvalued rand for the most part from the middle to the late 2000s, and the worldwide economic recession in 2008. Since 2010, the mean, nominal auction price of the springbok has increased by a mean of 23.1% on a year-on-year basis.

Wildlife producers also did better financially when selling an impala on auction during the late 1990s and even the early 2000s than in 2014. The mean nominal and real price trends for other smaller and more common, large-herd, meat-producing animals are similar to those of the springbok. However, the peaks and troughs of the mean prices varied for different types of wildlife. For example, the buying power from selling a trophy-quality greater kudu bull on auction was significantly higher in 2014 than in the preceding 23 years. Wildlife producers also received a better financial return when selling a red hartebeest on auction in the late 1990s than from 2001 onwards, while the real value of a blue wildebeest was lower in 2014 than in the late 1990s and earlier 2000s.

Generally, the growth in the mean nominal and real prices of rare animals, colour and morphological variants has outstripped inflation by a notable margin until 2013. However, the black impala which was considered to be an entry animal into the lucrative market for colour variants showed a sharp increase in early 2015 and changed it into a high-value product which was no longer an entry product.

Despite small fluctuations, the mean real price of a disease-free African savanna buffalo has showed a consistent increase from 1991 to 2005, with a more notable increase from 2006 to 2012. However, there was a decline in 2013 and 2014 when DNA studies revealed that no genetic difference exists between so-called East African, Kruger and Addo National Park, or any other perceived blood line, while some diseased buffaloes were also sold on some auctions. There also is an inability at present among wildlife ranchers to understand the role of DNA in the wildlife industry properly. Nevertheless genetic studies have led to a sharp increase in the mean price of the bontebok from R3583 in 2011 to R 37 004 in 2014.

The movement and reintroduction of wildlife from region to region also creates problems with diseases and parasites, but new DNA techniques may yield rapid diagnoses of diseases. For example, a case is known where greater kudus which were brought into the North West province from the Eastern Cape as food for lions spread tuberculosis (endemic in the Eastern Cape) and infected a neighbour´s buffalo population, despite excellent fencing, and created a loss R10 million. Vervet monkeys who cross wildlife fences are suspected to have caused this spread. Moreover, tuberculosis and brucellosis (contagious abortion) control in livestock do not really exist any more. Brucellosis was recently found in goats on a farm in the Beaufort West district where it also spread to humans, but it is rarer in wildlife.

For the white rhinoceros, a significant decline from 2000 to 2005 and again from 2008 to 2009 is apparent which caused the real value of the white rhinoceros in 2014 to be slightly less than what it was in 2000 and 2008. The mean nominal prices of colour variants remain high and this is expected to last for the next three to five years before stabilizing at levels lower than those of 2013 as a result of an increased availability of their progeny on the market. Black greater kudus already showed a mean nominal price decrease of 179 per cent from 2013 to 2014.

From 1991 to 2013, the mean nominal price that was paid per animal on live wildlife auctions in South Africa has increased by 59 times, the number of animals sold by 3.5 times, but the total turnover by 208 times. This shows that the nature of the animals being offered for sale has changed over time, particularly because more expensive wildlife entered the market. If increasing numbers of meat-producing animals are sold and the progeny of colour and morphological variants enter and flood the market in the future, the live animal sales industry will change again, but it will remain a force in the economy of the wildlife industry. However, the current inflated prices for some types of wildlife may put them out of reach of hunters that are the main driving force of the wildlife industry as meat hunters will not hunt them and some trophy hunters refuse to hunt so-called farm-produced wildlife. There is, however, scope for new ways in which to capture and market wildlife in the future.

 

References:

Cloete, F 2014. Amptelike wildveilingomset breek die miljard-merk. Game & Hunt 20(2): 63, 65 & 67.

Cloete, F 2014. Lewendewild-handel stoom voort. Game & Hunt 21(2): 71 – 74.

Cloete, P C, J du P Bothma, J G du Toit & J. van Rooyen In Print. Buying and selling wild animals. In J du P Bothma & J G du Toit, Game ranch management, sixth edition. Pretoria: Van Schaik.

 

article by Prof J du P Bothma

 

 

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