South Africa’s livestock, meat sector faces persistent challenges
SOUTH AFRICA – South Africa’s livestock industry is under intense pressure, grappling with economic hardships and environmental challenges.
Disease outbreaks, weak consumer demand, and razor-thin profit margins are creating a tough operating environment for farmers.
According to Paul Makube, a senior agricultural economist at FNB, despite these difficulties, Makube believes that recovery may be possible if certain economic and environmental conditions improve.
“Over the past two years, livestock diseases have severely impacted farmers, disrupting operations and cutting into profits,” Makube said, which shows the ongoing strain faced by the sector.
The stagnant prices for meat products further complicate the situation.
Consumer spending has been suppressed by economic challenges, leaving prices relatively unchanged.
For example, Class A beef, which sold for US$3.16 to US$3.42 per kilogram two years ago, now struggles to exceed US$2.94 per kilogram.
Feedlot operators, feeling the squeeze from shrinking margins, have also been forced to reduce their prices.
The cost of weaner calves has dropped from US$2.00 to US$2.05 per kilogram to as low as US$1.58 to US$1.68 per kilogram.
“Until consumer demand improves, prices are unlikely to recover,” Makube stated, suggesting that potential interest rate cuts could offer some relief.
He noted that lower rates might boost consumer confidence and drive meat purchases, particularly as the festive season approaches.
South Africa remains a key player in Africa’s agricultural economy as the continent’s leading producer of beef and poultry.
In 2022, the nation’s livestock production included 4.81 million sheep, 3.68 million pigs, and 3.26 million cattle.
Chicken remains the most widely produced livestock in South Africa.
On the consumption side, South Africans consume an estimated 2.9 million tons of meat annually.
This includes 1.8 million tons of poultry, 875,000 tons of beef, and 240,000 tons of pork.
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