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Meat prices signal expensive braais this festive season

A grade beef prices breach the R50/kg mark for the first time.
Image: Shutterstock

With Christmas only five weeks away, the current trend in meat prices signals prospects of expensive braais during the 2020 December festive season.

Seasonal demand for meat remains solid and has outweighed the relatively higher slaughter rate in the livestock complex, which would normally have resulted in lower prices due to the increased availability of the product. The pace of livestock slaughter has been relatively strong with cattle, sheep and pigs number slaughtered way above the 2019 levels.

At this rate, the monthly consumer price inflation for meat is expected to remain sticky on the upside relative to last year in the next Statistics South Africa (Stats SA) update. The meat CPI increased by 4.4% y/y during September 2020 in the last Stats SA release.

Beef

The A grade beef prices have for the first time breached the R50/kg mark due to higher demand and are currently over 15% above the 2019 levels. Good grazing conditions due to rains in some areas bodes well for prices in the medium term as producers will hold on to stock for a bit longer. However, other areas are yet to recover fully as evidenced by recent fires in parts of the Free State. The current strength in beef prices is likely to be maintained as we head closer to the festive period. Nonetheless, farmers wouldn’t necessarily smile all the way to the bank as the combination of the relatively high weaner calve prices and the elevated grain prices squeeze feeding margins in the short term.

Sheep

At current levels, lamb and mutton prices are 28% and 40% higher respectively relative to the 2019 levels and are 15% and 16% above the 3-year average for this time of the year. We expect prices to retain the sideways trend but with further upside in the short term on improved seasonal demand. The post-Covid-19 long term demand outlook however remains a concern given the high prospects of the weak economy and subsequent contraction of job numbers.

Pork

The upswing in the pig market continued with pork producer prices retaining levels above R30/kg due to the resilient demand and tighter volumes. Prices are now 15% and 9% higher from the 2019 levels respectively for pork and baconers and are both sharply higher by 37% and 36% relative to the 3-year average for this time of the year. The current uptick in pig carcass prices will continue underpinned by renewed demand as we approach the festive period. The rising maize prices in the near term and consequently higher feed costs however remains a concern as they will reduce producer margins.

Chicken

Unlike other meat types, the situation with chicken is that its product categories show a mixed trend with downward pressure for fresh whole birds while the frozen whole birds and IQF strengthened relative to the 2019 levels. Higher feed costs have significantly narrowed producer margins, thus necessitating upside pricing in line with red meat but in a competitive trading environment where this cheaper source of animal protein is often used as a loss leader.

All intensive livestock categories face high feed input cost pressures as yellow maize prices, a major feed ingredient, averaged R3 342/ ton in the last three months which is 24% higher year-on-year (y/y). This was underpinned by the strong export demand despite a huge harvest, with China accounting for 28% of total exports for the 2020/21 marketing season.

Paul Makube, senior agricultural economist at FNB.

COMMENTS   12

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The mooooost expensive braai by far is that with ANC ‘bribe packs’.

COMMENT HELD FOR MODERATION
29 NOVEMBER 2020 @ 6:01 PM
COMMENT HELD FOR MODERATION
29 NOVEMBER 2020 @ 5:58 PM
COMMENT HELD FOR MODERATION
29 NOVEMBER 2020 @ 5:55 PM
COMMENT HELD FOR MODERATION
29 NOVEMBER 2020 @ 5:48 PM
The bias toward the minority view is most certainly the preference of this website..

COMMENT HELD FOR MODERATION
29 NOVEMBER 2020 @ 7:55 AM
Moneyweb is evidently employing the new advanced style of censorship? Comments that are too difficult for the admin bot to categorize are simply held indefinitely?
COMMENT HELD FOR MODERATION
28 NOVEMBER 2020 @ 5:36 PM
Agree about the biggest issue being further pandemic reactions. Dems want lockdowns until vaccinations completed = success for economic suicide and vaccine merchants. But now there is a truth leak that must surely sprag the vaccine merchants and scuttle the prospective bargain business acquisition targets. A high level analysis of the US Covid-19 deaths reveals errors that reduce these numbers into non-existence. https://www.aier.org/article/new-study-highlights-serious-accounting-error-regarding-covid-deaths/
All hands on deck to fix the leak and PR it into river? You bet.
The acceptance of this analysis will have global repercussions.
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So much for freedom of speech.

As a beef and mutton farmer I am going to celebrate. Maybe use a little of my extra income to protect my property against the ANC sanctioned terrorist arm, the Effectively For Fools thugs.

Save myself getting murdered.

A country with so much land available for grazing.
No drought currently plus cheap labor available.

Why is meat so expensive?

Push up the prices and the consumer can also stop buying.

Lack of supply, farmers are rebuilding their herds after a long drought. On top of that maize is extremely expensive making feeds more expensive.
Quality breeding livestock are extremely expensive at the moment.

Don’t turn to the farmer with a whine about meat prices, look at the middlemen. Look at Woolworths the most expensive meat in the country. When you buy your lean karroo lamb there be rest assured it was from a nice fat animal, but the fat was cut off by the butcher because the housewife believes lean meat is healthy. Lean meat is tough and tasteless.

we have the most expensive electricity in the country, when Eskom installed power for us we had an agreement that the line charge would last 24 years to cover the lines cost. We are still paying a line charge, a network charge and others. Our cost before a unit is used is R4000.

Labor is expensive, fuel is expensive and our income goes up and down. Because the government can’t control diseases like Brucellosis, foor and mouth we often get shut down and cannot market, or have to cull like with swine fever. The ANC removed the tech services that used to monitor and control proper vaccination of livestock, so now out breaks of disease are common.

THAT BRIEFLY IS WHY MEAT IS EXPENSIVE!!!

Eskom has definitely nothing to do with the breading of livestock,
maybe for chickens yes.

Land is plentiful, sun and water(if it rains) are for free. The grass grows by itself (for free item).

Very few industries get anything for free.

I suspect it is the “middleman”.

Eskom is used to pump water, mill feed and mix it. Cattle and sheep don’t just finish on grass.

You obviously know absolutely nothing about farming. My game for the last 48 years.

Thats probably why the guy in the picture is braaiing bananas and viennas..

Remember – Inflation according to Stats SA is only 3,2% …. WTF

When one look at the article image (imported from abroad/Shutterstock)…that’s NOT how South Africans braai 🙁

Meat must be really expensive in parts of Europa & Asia, when the norm is to heat up Pork sausages & Viennas over an open flame….or strangely, the Americans with their meat patties 😉

At least there’s something us Saffas still does well….and expats swear that there’s still NOTHING like a proper South African braai.

Here is what the article image SHOULD’VE looked like:

https://bbqboy.net/things-you-must-know-about-south-african-braai/

or this…

https://www.alamy.com/stock-photo-meat-cooking-on-a-south-african-braaibbq-54024696.html

(…now let me disappear, time to get the fire started!!)

End of comments.

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