Recent rains good for maize production and poultry industry‚ but price of red meat still likely to increase: Agri SA

That good rains have fallen since October 2016 and that “still more are expected to fall during the course of the year” bode well for agricultural crops‚ Agri SA said on Wednesday.

“If the rainfall continues and grain production improves as predicted‚ we are likely to see a drop in food prices‚ probably in the third quarter of  2017. This will bring some relief to consumers‚” said senior economist Hamlet Hlomendlini.

“However‚ on the red meat side‚ things are highly likely to be different. Due to drought‚ scores of cattle and sheep died helplessly‚ and there was nothing farmers could do in some areas.

“Others were forced to slaughter to prevent their animals from dying on their own. In 2016‚ more than 15 000 cattle per week were being slaughtered - however‚ that did not bring much change on the meat prices as they stayed relatively flat.”

Hlomendlini predicted that farmers “will cut down significantly on the slaughtering due to two reasons: one being that there isn’t much to slaughter; two‚ due to the fact that farmers are now focusing on rebuilding their herds which might take up to three years to rebuild”.

This could mean that meat will have to be imported to meet local demand‚ which will push up red meat prices substantially in 2017.

Maize production‚ Hlomendlini said‚ is estimated to reach more than 12-million tonnes in the current season‚ which ends in April‚ compared to the 7.5-million tonnes of the previous season.

This would benefit the poultry industry‚ as maize is used to feed chickens‚ he explained.

“This will certainly improve productivity in the industry‚ which will in turn lead to a drop in chicken meat prices as the supply increases.

“However‚ this will also depend to a greater extent on how competitive the local producers are against other producers‚ especially those from the EU and the USA‚” Hlomendlini added.