Meat prices expected to increase before December

South Africans tend to increasingly celebrate by eating red meat, but meat prices are expected to rise by at least nine to 15 per cent from now.

September 23, 2016

2 minutes read

Red meat prices are expected to increase.

MBOMBELA – Braai season officially kicks off with National Braai Day tomorrow. As spring becomes summer and the end of the year speedily approaches, . This is due to tight supply and increased demand by consumers over the festive season. As a result of the drought slaughtering has been substantially higher this year, in comparison with the past three years, Makube said.

“The cumulative sheep slaughter number is currently 111 per cent – 69 per cent higher than the 2015 and 2014 levels respectively. However, despite an increase in slaughtering, we did not experience an oversupply of meat which would have resulted in lower prices due to exports and a strong demand for our meat in the tourism sector.

“In terms of the outlook for beef, we are heading into a seasonal price increase of between R3,4 and R5,7 per kilogram for Class A beef as braai season returns. Consumers who prefer to braai lamb can expect to pay between R5,6 and R9,4 per kilogram more for Class A lamb over the festive period,” he said.

Pork is also expected to benefit from the price gain of red meat. However, there shouldn’t be much of a price movement in poultry due to increasing imports.

“Despite continued pressure on disposable income, consumers will still be able to absorb a slight increase in meat prices during the festive period, while others will opt to purchase red meat in bulk to outweigh price increases,” Makube said.

“Even in tough economic conditions, we have picked up a trend where consumers will usually cut back on luxuries and non-essentials, but generally spend more on food and meat during the festive season.”

However, Makube cautionrd that prices would have to return to normal levels in January to avoid resistance from consumers.

With rain expected in the coming months, the situation should start improving for livestock farmers who have suffered financial losses as a result of the drought.

“Forecasts are now projecting neutral conditions for the 2016/17 season, meaning that we should expect normal, instead of above-normal rainfall as had been previously estimated.”

This should allow the sector not to have to worry about possible damage from floods, torrential rain and heavy winds, while the expected rainfall should be sufficient to begin rebuilding herds.

“By mid-2017, we should see a moderation in grain prices which will lower animal feed costs, resulting in improved margins and profitability levels for farmers who are currently facing losses due to the recent drought,” Makube concluded.