know that you are about to pay more for it?
As braai season approaches, red meat prices are expected to trend
higher by at least 9 to 15 percent from now until December due to
tight supply and increased demand from consumers during the festive
season.
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.
Paul Makube, Senior Agricultural Economist at FNB says red meat
slaughtering has 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.
"In terms of the outlook for beef, we are heading into a seasonal
price increase of between R3.4 and R5.7 per kilogram (kg) for Class A
beef as braai season returns. Consumers that prefer to braai lamb can
expect to pay between R5.6 and R9.4 per kg more for Class A lamb over
the festive period," says Makube.
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.
"Even during 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 cautions that prices would have to return to normal
levels in January post the festive season to avoid resistance from
consumers.
He says that with rain expected in the coming months, the situation
should start improving for livestock farmers that 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.
