This is according to Paul Makube, Senior Agricultural Economist at FNB. Makube says the seasonal demand for meat in South Africa is still solid and the pace of livestock slaughter has been relatively strong with the numbers of livestock slaughters exceeding that of 2019. OFM News’ Elsabé Richard reports on what the different meat prices might look like this coming festive season…

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Makube says that if slaughtering continues at this rate, consumers can expect to see the monthly consumer price inflation for meat remaining sticky compared to 2019 in Statistics South Africa’s (Stats SA) upcoming statistical update. He adds that a higher slaughter rate usually means lower prices due to the availability. 

Here are what current meat prices look like and what consumers can expect this December:

Beef

"The A grade beef prices have for the first time breached the R50/kg mark due to higher demand and are currently over 15% above the 2019 levels. Good grazing conditions due to rain in some areas bodes well for prices in the medium term as producers will hold on to stock for a bit longer. However, other areas are yet to recover fully as evidenced by recent fires in parts of the Free State. The current strength in beef prices is likely to be maintained as we head closer to the festive period. Nonetheless, farmers wouldn’t necessarily smile all the way to the bank as the combination of the relatively high weaner calve prices and the elevated grain prices squeeze feeding margins in the short term.

Sheep 

At current levels, lamb and mutton prices are 28% and 40% higher respectively relative to the 2019 levels and are 15% and 16% above the 3-year average for this time of the year. We expect prices to retain the sideways trend but with further upside in the short term on improved seasonal demand. The post-Covid-19 long term demand outlook, however, remains a concern given the high prospects of the weak economy and subsequent contraction of job numbers.

Pork 

The upswing in the pig market continued with pork producer prices retaining levels above R30/kg due to the resilient demand and tighter volumes. Prices are now 15% and 9% higher from the 2019 levels respectively for pork and baconers and are both sharply higher by 37% and 36% relative to the 3-year average for this time of the year. The current uptick in pig carcass prices will continue underpinned by renewed demand as we approach the festive period. The rising maize prices in the near term and consequently higher feed costs, however, remains a concern as they will reduce producer margins.

Chicken 

Unlike other meat types, the situation with chicken is that its product categories show a mixed trend with downward pressure for fresh whole birds while the frozen whole birds and IQF strengthened relative to the 2019 levels. Higher feed costs have significantly narrowed producer margins, thus necessitating upside pricing in line with red meat but in a competitive trading environment where this cheaper source of animal protein is often used as a loss leader.

All intensive livestock categories face high feed input cost pressures as yellow maize prices, a major feed ingredient, averaged R3 342/ ton in the last three months which is 24% higher year-on-year (y/y). This was underpinned by the strong export demand despite a huge harvest, with China accounting for 28% of total exports for the 2020/21 marketing season,” concludes Makube.

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