Red meat prices in South Africa are set to increase by between 9 and 15% from now until December due to tight supply and increased demand from consumers during the festive season.
The unfortunate announcement was made recently by First National Bank (FNB), one of the country’s leading banking groups.
Currently, red meat prices are relatively stable to strong due to tight supplies as livestock farmers hold on to stock and avoid slaughtering in the hope that pasture conditions will improve should seasonal rains materialise sooner, the Johannesburg-based financial institution said.
Southern Africa has been severely hit by drought in the past three years or so allegedly caused by the El Nino weather pattern, with reports of cows, goats, sheep and other livestock getting sick or dying of hunger and thirst in many parts of the region. In some areas, livestock owners have reportedly been forced to move from one location to another in the hope of finding suitable pasture and enough water for their animals.
Paul Makube, senior agricultural economist at FNB, said red meat slaughtering had been substantially higher this year compared to the past three years as a result of the drought.
For example, the cumulative sheep slaughter number is currently 111% and 69% higher than the 2015 and 2014 levels respectively, he explained.
However, despite an increase in slaughtering, Makube said South Africa did not experience an oversupply of meat which would have resulted in lower prices due to exports and a strong demand for the country’s meat in the tourism sector.
“In terms of the outlook for beef, we are heading into a seasonal price increase of between R3.40 (US$0.25) and R5.70 (US$0.38) per kilo for Class A beef as the roasting season returns,” he said.
“Consumers that prefer to roast lamb can expect to pay between R5.60 and R9.40 (US$70) per kg more for Class A lamb over the festive period,” Makube said.
Pork will also benefit from the price gain of red meat. However, there won’t be much of a price movement in poultry due to increasing imports.