Categories: South Africa

Consumers must brace for stronger December meat prices

Cash-strapped South African consumers will have to dig deep into their pockets if they are looking to splurge on red meat and pork this December.

Cash-strapped South African consumers will have to dig deep into their pockets if they are looking to splurge on red meat and pork this December.

Prices of these meat categories are currently the strongest they have been in years, and experts expect this trend to continue into December and possibly for some time beyond.

Paul Makube, senior agricultural economist at FNB, said that “for the first time”, the producer price of A-grade beef had breached the R50/kg mark, and was more than 15% above the prices achieved at the same time last year.

Lamb and mutton prices were currently 28% and 40% higher respectively, compared with last year.

Pork producer prices remained above R30/kg, with pork and baconer prices standing at 15% and 9% higher respectively than at the same time last year.

“All intensive livestock categories face high feed input cost pressures, as yellow maize prices, [which is] a major feed ingredient, averaged R3 342/t in the last three months; which is 24% higher year-on-year. Seasonal demand for meat remains solid and has outweighed the relatively higher slaughter rate in the livestock complex, which would normally have resulted in lower prices due to the increased availability of the product,” Makube said.

“The pace of livestock slaughter has been relatively strong with [numbers of] cattle, sheep and pigs [being] slaughtered [sitting] way above 2019 levels.”

Gerhard Schutte, CEO of the Red Meat Producers’ Organisation, said stronger beef, lamb and mutton prices were “good news for producers”.

He also reminded consumers that South Africa’s average red meat prices remained around 30% below average international prices, so the country’s current red meat prices were still “a bargain”.

“Not only are our red meat prices internationally competitive, but we also have very high-quality red meat in South Africa.”

Johann Kotzé, CEO of the South African Pork Producers’ Organisation, said that while pig farmers appreciated and were “excited” about the current and expected strong prices, the currently high feed prices that made up 70% to 75% of pork production costs, were putting the pinch on profit margins.

“We also have a bit of a concern that pork retail prices may go too high. We have consumers who, to a certain extent, are cash-strapped and this could pose a demand risk in future. However, competition from pork imports is limited, and the demand for local pork is overwhelming. This, for us, is a good sign. South African consumers are increasingly appreciating the value and versatility of pork in their diet,” he said.

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Lloyd Phillips

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