Red meat producers struggle as drought continues

Sporadic rain over the summer rainfall region of South Africa resulted in pockets of drought in virtually every district in the area.

This is according to Lardus van Zyl, chairperson of the Red Meat Producers Organisation (RPO). He said it is very difficult to make an informed estimate of the situation. “I’ve been travelling extensively through the Free State and North West recently. The grazing was, as far as I could see, in a reasonable condition but was dotted with areas of drought.”

According to him, grazing in the Eastern Cape and the southern Free State is looking exceptionally good while parts of Limpopo received very little rain. “Excellent veld conditions and dire drought is found in nearly every district,” he said. Andre Ferreira, chairperson of the RPO Free State, explained that grazing in the rest of the Free State is in a poor condition and contributed to a marked drop in meat prices.

High maize prices pushed up animal feed prices and farmers are forced to sell their stock. “Prices are falling weekly partly because of the increased supply. Weaner prices came down by nearly 36% from about R18/kg in November last year to between R14,50/kg and R15/kg currently.” Van Zyl blamed the red meat retail industry for a decline in red meat demand following the high prices at the end of 2011.

January’s red meat price came down by as much as 20% from R24/ kg in December 2011. “The retail industry did not reduce prices accordingly. This caused consumer resistance which impacted negatively on the demand for red meat. It is only now, nearly three months later, that we see the lower prices filtering through in the retail industry.”

Nicol Moller, chairperson of Agri Molopo and red meat producer from Tosca in North West, warned that prices can be pushed down even further as producers will start marketing weaners very soon. “The market is over-stocked as it is because of the drought. This years’ weaner batch will enter the market over the next six to eight weeks. Coupled with high input prices such as fuel and animal feed, this might force some farmers off their farms.”

The situation is the same in the Northern Cape with good grazing and extremely poor grazing in a single district, according to Johan van Rensburg, CEO of Agri Northern Cape. Very dry conditions have also been reported in the central region, around Williston and Carnarvon. –