Invest wisely to weather storms in the wildlife industry
The gaming industry grabbed the headlines in the mid-2010s, as animal prices skyrocketed thanks to color variants like the black impala and golden wildebeest. Buffalo prices have followed suit and paying over R100 million for an animal was not uncommon in 2016.
However, as many had predicted, the bubble inevitably burst, leaving countless longtime game farmers in the pinch. This situation was exacerbated by the drought that followed, followed by COVID-19, which led to the closure of hunting activities for most of 2020. In other words, game farmers were pushed to their limits.
Nonetheless, for the Sullivan family, owners of the Bongela Private Game Lodge in Vaalwater, Limpopo, wildlife breeding still holds great promise. The lodge derives 70% of its income from hunting activities and also offers bush getaways for families.
What started as a weekend destination for the Sullivans in 2012 quickly turned into a business as the family realized the value of sharing the property. However, the timing was not on their side and they have had to weather storms in the industry over the years.
“We entered the industry too late in the expansion period to benefit from it [from it], explains Jaco Sullivan, director of Bongela.
âWe bought animals when prices were high and then the market fell. We certainly suffered a financial loss, but luckily we bought with caution, so that we could handle the impact.
âOthers saw rising prices as a way to make a quick buck. We saw firsthand how people were borrowing heavily, buying land and pushing a few million rand of animals on this land, believing they would keep them for a while and later kill them at an auction. . It never happened, and they were crippled with debt.
“Since the price of hunting animals has not fallen, but rather [that of] color variations for breeding purposes, we could cushion the blow to the business. When the [price] the bursting of the bubble, we have not lost sight of our vision and our passion for wildlife. Today we are still positive about the industry and can see that there is an increasing demand for hunting. “
Sullivan notes that the farm’s breeding program has also helped the company,
because the purchase of animals for hunting purposes does not make financial sense.
âWe also aim to improve genetics so that we can offer better animals to hunters and auctions. “
The breeding program includes sable and roan antelopes, Livingstone elk, Nyala, wild bushbuck and buffalo. Sullivan chooses to remove weaker genetics, and these animals are either auctioned off or used for hunting. Those with superior genetics are used to reproduce further. The characteristics they select for include horn growth and length, structural accuracy, time between calvings, males and females.
Sullivan explains that these animals were chosen for their popularity with hunters and the economic value they hold.
âThey are sought after animals to hunt, both by local and international hunters. The value of the buffalo will always remain high because it is only one of those animals that everyone wants to hunt.
âBut we have seen in recent years that even kudu and cob have become popular. Prices for kudu, in particular, are rising because supply fails to meet demand. It takes a long time for a kudu bull to reach maturity, and for a long time farmers did not breed kudu because they were not seen to be of value. Now there is a shortage of kudu, which is usually what happens when an animal is not of great value. We therefore keep all our females at this stage and only authorize the hunting of the bulls in order to be able to constitute the herd of kudu.
When it comes to color variants, Sullivan thinks it is interesting to breed these animals because there is always a demand for them. âWe don’t really focus on selecting color variants, but if they exist, they are in demand; but not at the exorbitant prices they once got, âhe adds.
Commenting on the move to online auctions with the advent of COVID-19, Sullivan says that although auctions initially took a hit, buyers and sellers quickly realized the convenience and economy of going online. .
“However, I think the prices have come down because there is no such thing as a bidding rivalry like when everyone is in the same room.”
The dynamics of the hunting industry have also changed in recent years, but Sullivan is certain of one thing: demand is increasing.
âHunting has always been a ‘male activity’, something a father and son did together. But over the past 10 years, it has gradually evolved into a family activity or a corporate team building activity. Mothers and daughters now hunt too. And, across business groups, many more people are exposed to the industry who might never have seen a live impala before. Hunting is now considered a great outdoor activity.
These changes have resulted in a shift in the way the hunting experience is delivered, and Sullivan notes the importance of facilities that cater to a wider audience. This includes cozy cabins, pools with a view, and even spa treatments.
Since its market is predominantly local, restrictions on international travel have not affected the company too much. âHunting remains a luxury [activity] and it is not cheap.
However, it is not unaffordable for South Africans. We have foreign hunters, but we don’t depend on them because our goal has always been to respond to the local market. The international market is difficult to penetrate and we are expanding in this segment every year, but local business groups remain our biggest customers and the market is healthy, âhe explains.
âI have also seen that South Africans are increasingly interested in sable hunting. [antelope]; previously there were only foreigners [who were interested]. But prices have stabilized and [sable antelope] have become more favorable.
Sullivan notes that word of mouth has been their greatest marketing tool. âWe advertise on social media here and there, but every year we get new groups coming in after hearing good stories from others. “
With prices stabilizing and the drought largely over, the future of South Africa’s hunting industry could look bright, if there were no other challenges looming.
The argument against hunting, mainly from a European audience, and the lack of consideration for the role it plays in conservation, are obstacles that have plagued the sector for some time.
“It is frustrating that a person overseas can give their opinion out loud about an industry they have nothing to do with and which has nothing to do with what is actually happening on a farm in Africa. from South. The world is stirred against the lion hunt; I think we’ll be wrong if we stop hunting lions, because those who offer hunts keep them. If the hunt stops, reproduction stops and the natural lion population will eventually be eradicated, as their habitat is also destroyed. So to encourage conservation, we need hunting, âsays Sullivan.
He says he’s nervous that the legislation and a misunderstanding of the industry means the hunt will be completely stopped.
âIf that happens, it will wipe out the wildlife industry because there will be no reason for a farmer to raise and conserve wildlife. The farms will be sold and the veld will recede because there will be no reason for anyone to own a farm and take care of the land either. The only way for us to have a healthy wildlife population and a robust ecosystem is if there are people investing in it, and that only comes with an economic incentive which, in this case, is hunting. . “
Despite this, sentiment in the industry has remained positive, and Sullivan says it’s because people, for the most part, understand conservation and hunt with respect for animals.
âAt the end of the day, the animals are thriving and the people in the surrounding areas have jobs because the lodges that offer hunting support a much larger economic community. Any legislation that hinders the hunting industry will have an impact on our business, rural communities and the economy of the country.
Maintaining resilience has been a family effort for Bongela. Sullivan credits his grandfather’s financial acumen and hardworking nature as the reasons for their success.
âMy grandfather played a big role in starting the business. He and my father are careful with their investments because money never came easily when they were young. We believe there is no quick money, and just putting all of your funds into something in the hopes of reaping a windfall is never part of the strategy.
âLikewise, we’re not going to invest in anything if it doesn’t make money. If we invest, we look at the risks and the opportunities, and then we go for the long term. We may not have anticipated COVID-19, but we could weather the storm because we’re keeping our overheads low.
âMy grandfather taught us to work for what we want and never give up. You can’t sit and wait for something to fall on your lap. You should also stay on your knees; you can’t do anything without God.
Email Jaco Sullivan at [emailÂ protected].