Agribusiness leaders have warned against recent media reports claiming that agriculture received 2,6% less for produce in August, while consumers still forked out 19,2% more at the till.
“These figures should be treated with circumspection as there is a market delay between producer and consumer prices of three to four months on increases and two to three months on decreases,” said Jannie de Villiers, the executive director of the National Association of Maize Millers. predicted that the current sideways movement of commodity prices would soon be reflected on the shelves.
H e added that bread price differences between different manufacturers are already obvious and general reductions should be visible towards the end of the year, or early next year. He said wholesalers have very low stock levels as they are anticipating lower prices in the near future. Prof André Jooste, an economist at the National Agricultural Marketing Council, said farm gate prices peaked in June and July, but are in decline, which should become obvious in shops from November. D r John Purchase, the CEO of the Agricultural Business Chamber, said commodity prices will always be more volatile than consumer prices, because price volatility is absorbed and equalised as a product moves through the value chain. He said reduced producer prices are already visible in terms of consumer goods.
Arnold Brand, chairperson of the Red Meat Producers’ Organisation said producers are price takers with little control over the retail sector. “There has to be a balance between what producers receive for their products and the price the consumer has to pay,” he said. “The crux of the matter is that our products need to be sold.” added that producer organisations should explain that farmers simply cannot produce below certain price points. – Wouter Kriel