Introduction:
Due to the continuous changes in the market and regular requests from our clients, regarding updated market related information, AWA has decided to distribute a monthly newsletter to all our valuable clients to update them on key issues and the latest pricing trends in the market. The newsletter will assist our clients in understanding the movements in the market and the latest news related to the industry.
We invite all stakeholders to submit information, articles, and request for specific topics they want to publish or address in the monthly newsletter. These topics or requests will enhance the quality and relevancy of the newsletter and inform our subscriber base of relative and key information about the industry. We will add these articles and information free of charge to the newsletter. This newsletter however will not promote or create a platform for advertising products or services.
Key Industry News
The year so far has seen unprecedented activity in the wildlife market. The activity in auctions in the wildlife market has not seen this buoyancy since the peak periods of the industry during 2014 to 2017. We have seen an abnormal increase in enquiries and requests for game since March 2021 through to May 2021 and double digit revenue growth in our bi monthly auctions against 2020.
We have noticed some interesting trends in prices of certain species, increasing at a higher rate of inflation this year. These price increases are mainly due to the demand of certain species exceeding the supply. There is a noticeable shortfall in supply of several species in the market which will continue to impact positively on the pricing of these species for the foreseeable future. Prices of certain game species, like zebra and giraffe, have been flat for the last ten years but have seen a substantial upwards trend this year. This trend boasts positively for the future market growth of the industry.
Specific Market Tends related to clients
AWA has over the past three year projected certain changes to the industry in our Annual Game Price Industry Report. Those projections and estimates are starting to realise this year and impacting on market pricing.
The dominance of major industry players (and breeders) in the game industry, relative to auctions, have substantially reduced in the past two years. The impact of this change can clearly be seen in profile of current active buyers registering for auctions. Pre 2020 auctions were dominated by these major players, but the last two years have seen a complete realignment of the market to hunting, small and medium game farmers and breeders.
The industry was dominated by these large and consortium game breeders during the periods 2014 to 2018, hosting major auctions and controlling the market spend for up to 75% of the annual revenue of the auction industry. We have seen a major change to this trend during 2020 and even more prevalent in 2021. The major players are no longer investing in the game industry to the extent of which they participated pre-2020. Latest estimates and analysis of buyers on auctions indicates that the market percentage spend of these major players have reduced drastically. The market spend is now dominated by hunting and small to large game farm owners. These farmers are close to 80% of the current industry spend and continue to growth monthly. Very interesting, is the growth of a new market segment driven by farmers investing in rare game due to the affordability of the current rare game prices. It is currently, for example, more affordable to buy a sable cow on auction than a kudu cow. The lower prices allow this market segment to actively participate, acquire and in invest in the rare species market segment, they previously could not participate in.
Drastic reductions in the rare game prices since 2017 has created and established a new market segment for the industry. Most of these species are now affordable for this segment and the entry of these players in the market has created a huge market potential for these species. Important to note that several new players have now entered this market segment. These players are all new entries to the market and have no history or recollection of the collapsed prices of the rare game market in 2017 to 2019. They see massive growth opportunities at these lower prices and therefore new investments are starting to materialize again in the game industry. Their input base for acquiring rare game is substantially lower , thereby creating the possibility of materializing reasonable long-term returns on these investments.
Key statistical data for 2021
Summary of specific specie price increases
Certain species have been impacted more than others, due to the shortage of supply in the market. The “bread and Butter” lines for local and corporate hunting is currently experiencing the highest demand, therefore also seeing the biggest percentage increase in prices. We believe it is important to highlight the following specific species:
- Kudu Females/family groups
Kudu Females/family group price summary
2017 Average: R4 522
2018 Average: R5 286
2019 Average: R4 453
2020 Average: R4 516
February 2021: R7 404
March 2021: R6 887
April 2021: R6 900
May 2021: R7 125
The demand for kudu family groups is enormous and we cannot fulfil the current demand at this point. The continued drought over the past ????????????????
- Gemsbuck Females/family groups
Gemsbuck Females/family group price summary
2017 Average: R8 625
2018 Average: R6 363
2019 Average: R6 369
2020 Average: R6 829
February 2021: R7 350
March 2021: R8 350
April 2021: R10 000
May 2021: R10 733
The demand for gemsbuck family groups is high and we cannot fulfil the current demand.
- Zebra
Zebra price summary
2017 Average: R3 735
2018 Average: R3 857
2019 Average: R3 667
2020 Average: R3 624
February 2021: R4 000
March 2021: R4 496
April 2021: R3 992
May 2021: R4 130
The demand for zebra animals is driven by the market for culling and venison. Rand per kilogram prices for zebra meat are currently very attractive and forces the auction prices to increase to ensure supply to the hunting market.
- Red hartebeest Female and family groups
Red hartebeest female and family group’s price summary
2017 Average: R5 806
2018 Average: R4 469
2019 Average: R3 872
2020 Average: R6 897
February 2021: R7 200
March 2021: R7 600
April 2021: R8 000
May 2021: R8 277
Red hartebeest is difficult to breed in the bushveld. They also do not take kindly to drought in areas. These factors impact the quantities of red hartebeest and the shortage of supply is currently the largest of all species.
Rationale of the increase in prices of certain species
Several factors impacted on the shortage of supply of certain species in the market. We believe they can be categorised and explained as follow:
- Supply shortage created by extensive breeding projects
Several game farm owners converted portions of their farms into breeding camps. This reduces the natural habitat for breeding of certain species. These farm owners also reduced their plains game breeding project and focused on extensive breeding for rare game species. This action impacted on the breeding and growth of certain plains game species like blue wildebeest females.
- Long-term drought in the catchment area
The impact of the last 7 years of below normal rainfall has had a severe impact on some of the species. The shortfall of kudu cows and red hartebeest species can directly be attributable to the last years of drought in certain areas
- Demand for venison meat driven by several factors
The production of venison meat has materially increased in the past three years. There are now several “culling” outfitters that focus on suppling of venison to butcheries and the export meat market. This new market segment has reduced availability of certain species to the auction market substantially.
- Lack of international hunting forcing game farmers to cater for local and corporate hunting
Several hunting farms catering exclusively for international hunters were forced to move into the local market to ensure their survival. They are now catering for corporate and local hunters and required the necessary game species on their farms to address this market segment. Most of these farms focussed mainly on male and trophy animals in the past. They needed to stock up for the new market segment and have started to buy mostly plains game species for their farms.
We believe this trend will continue in the foreseeable future. This will also continue to have an impact on prices and continue to drive the current upwards trend of prices in the market.
Trend Comparison between auction and culling prices
Demand for meat/venison has grown exponentially the past three years. This demand for venison has impacted on the supply to game auctions during the past two years. Weak prices in certain species made it more profitable to cull animals than sell on the auctions. Species, like giraffe and zebra, meat or culling prices are more attractive to game farm owners that catching and selling on auctions.
The following table will explain the interaction and impact this have on the game prices:
| Specie Name | Ave Weight | Rand per kilo | Venison Value | Auction Price | Capturing Cost | Net Price Animal |
| Zebra | 140kg | R23.00 p/kg | R3 220 | R4 200 | R800 | R3 400 |
| Giraffe male | 750kg | R20.00 p/kg | R15 000 | R18 000 | R4 000 | R14 000 |
| Bluewildebeest | 75kg | R30.00 p/kg | R2 250 | R3 500 | R800 | R2 700 |
| Impala | 25kg | R30.00 p/kg | R750 | R1 100 | R300 | R700 |
The table clearly indicates that game auction prices are now driven by the venison prices received on certain animals.
Market Segment analysis
Contrary to the decrease in revenue in the game auctions since 2017, we see a phenomenal increase in new entries(buyers) in the market. First-time buyers or new buyers’ registrations are up by over 50% year on year at AWA auctions, averaging over 20 new registration per auction. Online registration growing at a phenomenal rate of 100% up per auction on last year numbers. AWA has on average 90 online bidders per auction, 30 telephone bidders and between 50 to 70 buyers in the hall. The average total number of registrations on auction are up by 30 present up year on year so far. Every auction this year, the registrations have exceeded 150 bidders per auction. These registration quantities are materially up on the last two years numbers
Highlights of past 4 months auctions
Contrary to the decrease in revenue in the game auctions since 2017, we see a phenomenal increase in new entries(buyers) in the market. First-time buyers or new buyers’ registrations are up by over 50% year on year at AWA auctions, averaging over 20 new registration per auction. Online registration growing at a phenomenal rate of 100% up per auction on last year numbers. AWA has on average 90 online bidders per auction, 30 telephone bidders and between 50 to 70 buyers in the hall. The average total number of registrations on auction are up by 30 present up year on year so far. Every auction this year, the registrations have exceeded 150 bidders per auction. These registration quantities are materially up on the last two years numbers
AWA leading the way in new flexible options for our clients
The event of Covid has forced the industry to move more rapidly to online and internet technology. Contrary to announcements in the media regarding online technology, AWA was the first auction house in South Africa to offer live webcasts and online bidding on the internet platform, since 2014. AWA has hosted more than 300 online and live webcast auctions over the past 7 years and arguably have one of the most stable and user-friendly online platforms in the industry. AWA is the only auction house that owns and use its own streaming technology and does not rely on partners to ensure the quality of streaming on their auctions. Wildlife Auctions (AWA’s platform) currently have over 7 500 registered users on its website. 50% Of these registered users are active users and participate using the website and app functionalities regularly. Most of the users have actively used the website and app for many years and are very comfortable with the functionality and technology available on the platforms, which improves AWA take up for every auction.
