World meat industry news

Poultry and red meat producers in Southern Africa are bracing for a steep rise in feed costs after drought conditions affected South Africa, the biggest grain producer in the region, writes Tawanda Korombo.

The grain shortages in South Africa will be felt across the region and will have knock on effects on poultry and red meat producers.

Countries such as Zimbabwe and Malawi, Swaziland and Lesotho that rely on food imports from South Africa will be affected the most as South Africa is likely to cut on exports. Zimbabwe already has food shortages and poultry and other meat producers in the country are already reliant on straight imports from neighbouring Zambia.

Poultry and red meat producers in South Africa say the coming year will be problematic for their animals as animal farmers battle for scarce food resources with humans.

Any scaling down of operations by poultry and red meat producers in the region as a result of rising feed costs will also lead to job losses, and leave the region with a deficit of white and red meat supplies, especially with some countries moving to ban imports of poultry products, industry players said.

“The poultry sector in countries such as Zimbabwe and South Africa will collapse if local production goes down. In Zimbabwe, the government already restricts imports.

“The regional poultry companies will take a setback as a rise in feed costs will cut their profitability. This will force them to hold off any new investments in expansion, with firms such as Astral likely to be affected,” said Patrick Crawford, an agricultural consultant.

Professor Roman Grynberg of the Botswana Institute for Development Policy Analysis said this week Botswana allowed imports of chicks and stock feeds where scarcities existed. However, imports of feeds raised poultry prices in the southern African country which because of grain shortages in the region may have to import at even higher prices.

“Import licenses have been issued but only where local scarcities exist. The result of this is that the price of poultry in Botswana is considerably higher than in South Africa,” said Professor Grynberg.

The United Nations (UN) said in a recent report that South Africa’s expected commercial maize crop for 2015 would be 31 per cent lower at 9.84 million tons.

Production of sunflower, and sorghum had also been affected by drought conditions afflicting some parts of the southern African region, despite excess rains in Malawi and Mozambique in the past year. Regional countries such as Swaziland and Lesotho had also suffered crop failures.

“This decline has led to an overall (food price) increase of 6.4 per cent in South Africa and to even higher increases in the main staple crop maize. In addition to maize, sunflower and sorghum have also been negatively affected,” said the UN report.

Red meat producers in the region will also take a hit from this, with the Red Meat Producers Organisation in South Africa saying feed shortages had already affected stock, with some herd succumbing to the drought conditions. Cattle farmers in Zimbabwe’s southern region said dry conditions were forcing them to streamline their herds to manage scarce feeds.

They said the coming dry months starting August would be difficult for their stock, highlighting that this would affect the quality of beef from the region. Zimbabwe is a former quality beef exporter to the region and to other international destinations.

“The next season will take us to a potential crisis as we start feeling the effects of the drought,” Gerhard Schutte, chief executive of the red meat producers grouping in South Africa.

Reports quoted Kevin Lovell, chief executive for the South African Poultry Association, saying higher feed prices would result in an increase in the prices of eggs and other poultry products in the region.

“The input costs have risen and we have already seen a move in our feed costs and producers would have to increase their prices if they are to maintain profitability.”