18 June 2024   •   Agriculture
Chicken farmers getting a smaller share of the retail price, says NAMC

While consumers paid more to buy chicken between February and April this year, farmers were paid less for this commodity, according to the latest Farm-to-Retail Price Spread report, published in May this year by the National Agricultural Marketing Council (NAMC).

Business Report said the NAMC found that the real farm value share of chicken over this period decreased by 3.26%, while the real farm-to-retail price spread (FTRPS) of a fresh whole chicken increased by 1.76%.*

The NAMC analysed data sets to compare prices paid by consumers for food with the prices received by farmers for corresponding commodities.

According to the report – compiled by the NAMC’s Corné Dempers and Dr Moses Lubinga – the real farm value share of fresh whole chicken meat reached 55.41% in April.

“From April 2023 to April 2024, the real farm value share decreased by 6.33%, while the real FTRPS increased by 14.97%. This could be due to the competitiveness in the poultry value chain being affected by factors such as imports and high feed prices, among other factors,” it said.

The NAMC reported that lamb and beef farmers also received a smaller share of the retail price, while pig and maize farmers got improved returns.

* The farm value share is the value of the farm product’s equivalent in the final food product purchased by the consumers. The FTRPS is the difference between what the consumer pays for the food product at retail level and the value of the farm product used in that product.

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18 June 2024   •   Chicken Industry
Rainbow returns to the JSE

Rainbow, South Africa’s second largest poultry producer, returns to the Johannesburg Stock Exchange (JSE) this month after an absence of more than a decade.

Rainbow’s current owners, RCL Foods, announced in a pre-listing statement that it would unbundle Rainbow to RCL shareholders, and that Rainbow shares would be listed separately on the JSE from 26 June 2024.

The Rainbow name disappeared from the JSE after RCL acquired Foodcorp in 2012, and changed the listed name to RCL Foods the following year.

Now Rainbow is coming back, considerably strengthened after some turbulent years.

RCL said earlier this year that Rainbow had made considerable progress with its turnaround. The final phase of the ramp-up of production at the Hammarsdale plant, and the continued benefits of a breed change, were expected to make a positive impact in the future, RCL said.

In an interview with Business Maverick, Rainbow MD Marthinus Stander said the company’s focus was on getting everything right so that it could produce chicken at the least cost.

Stander described the chicken industry as the “dynamo” of South Africa’s agricultural sector, consuming almost half of the country’s maize crop. He said it ranked high on international competitiveness ratings, but exports were lagging, particularly to Europe, due to the government’s limited ability to provide the health certifications needed.

“We need more from our Department of Agriculture. So I think our best bet and our real reason for being is to try to supply South Africans with the cheapest possible chicken and export strategically,” he said.

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18 June 2024   •   Agriculture
SA poultry farmers fear bird flu may return

Fears of a possible resurgence of bird flu in South Africa this winter have been highlighted by the international publication WATTPoultry.

The publication draws on an article in the latest edition of the Poultry Bulletin, official journal of the SA Poultry Association (SAPA). It also refers to the financial results of poultry producer Quantum Foods.

“Following heavy losses from highly pathogenic avian influenza (HPAI) over the second half of last year, South Africa’s poultry sector is preparing to resist a repeat of the mortalities and folded businesses in the coming months. There is pressure on authorities to allow poultry vaccination,” WATTPoultry reports.

“As winter approaches, the poultry sector in South Africa has renewed concerns about the threat of HPAI. In particular, farmers are facing uncertainty over the option for vaccination,” it says.

“Over the previous season, 10 million of the nation’s poultry were lost to the disease, according to SAPA, and many small farmers lost their livelihoods.”

It also notes the comments of leading veterinarian Dr Shahn Bisschop that, although no new HPAI infections have been recorded since January, some producers may be reluctant to report suspicious cases out of fear of having all their birds culled. The South African government does not compensate chicken farmers for culled birds.

Discussions over the simplification of vaccination protocols with the agriculture department (DALRRD) have not reached conclusion, and no farm has yet received approval to vaccinate.

“According to SAPA, not even the largest poultry companies are able to meet the biosecurity levels required for vaccination to be approved under current rules. Furthermore, it may now be too late to vaccinate the nation’s poultry flocks before the peak risk of infection,” WATTPoultry reports.

Related: Mexican man dies from bird flu

Scientists are not sure yet whether the bird flu death of a man in Mexico is a serious development or not for transmission of the virus to humans.

This is the first human death from the H5N2 strain of bird flu – different to the H5N1 strain which has infected millions of birds and several hundred humans around the world in the last two decades.

Scientists are puzzled, noting that H5N2 is a low pathogenic strain, meaning it is unlikely to cause severe disease in others. NBC News reports that the Mexican man was already very sick, and might have survived the bird flu infection had he been healthier. Investigations are continuing, as the victim had been bedridden for weeks and there is so far no evidence that he had been in contact with infected birds or animals.

While this is the first death from the H5N2 strain, the highly pathogenic H5N1 strain has killed more than 400 people around the world since 2003. The World Health Organisation reported last month  that of the 889 people known to have been infected with the H5N1 virus, 463 had died – a mortality rate of 52%.

While thousands of mammals have died of bird flu, they have nearly all been scavengers such as seals, sea lions, bears, foxes and felines, including domestic cats, that may have fed on infected birds. 

A mystery development this year has been the emergence of the H5N1 strain in dairy cows in 84 herds in the United States. No cows have died and the one dairy worker who contracted the disease only had mild symptoms. One theory is that the cows had been eating grass or feed that sick birds had infected.

There has so far been no indication that the virus has mutated to enable human to human transmission. Scientists remain vigilant.

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10 June 2024   •   Agriculture
The agriculture sector in Africa: are our leaders failing us?

Each year, African political leaders gather to set an agenda for the transformation of the region. While efforts have been made, the region – as compared to the rest of the world – continues to record little economic growth and high levels of poverty.

By Dr Ralph Nordjo
Development Economist, Management Board Member of the Ghana Chamber of Agribusiness (GCA)

Each year, African political leaders gather to set an agenda for the transformation of the region. While efforts have been made, the region – as compared to the rest of the world – continues to record little economic growth and high levels of poverty.

More talk leads to more promises, but little gets done. Given that not all of the talks move the needle or make impact, it’s vital that our leaders double down on the most impactful strategic growth and transformational areas of our African economies.

A key sector for the continent’s economic growth and poverty reduction is agriculture. The sector will comprise an estimated market value of more than $1 trillion by 2030 according to African Development Bank President Dr Akinwumi Adesina. It employs more than half of the labour force and is the main source of livelihoods for most citizens.

For decades, from the years of the Organisation of African Unity (OAU) right through to those of the African Union (AU), African leaders have initiated and implemented a plethora of agricultural policies. The main goal of these policies has been to increase crop production and productivity and ensure food security.

In light of this, the agricultural transformation agenda in most African countries has focused on increasing the use of fertiliser and adopting other agronomic practices to improve the health of the soil and deliver nutrients to crops and plants. Agricultural mechanisation and irrigation have also helped to increase agricultural production. However, this skewed approach – targeting limited value chain agriculture potential – has not really delivered much. 

So, what exactly has Africa gained over these six decades? Evidence shows that cereal yields in Africa still remain the lowest compared to other regions of the world. While the cereal yields from other regions or continents have increased by more than 200 percent in the past 60 years, Africa has only increased its yield by about 90 percent. 

In terms of food insecurity, approximately 60% of the people in Africa are either moderately or severely food insecure relative to the rest of the regions of the world. Also alarming is the number of people who are undernourished compared to other global regions. Why are we not fixing this, despite the abundance of resources available? 

A key sub-sector of agriculture is livestock production. In Africa, the contribution of this sector to agricultural GDP is estimated to range between 30 and 50%. However, there seems little or no attention paid to the livestock sector by most countries in Africa. 

This sector is dominated by poultry, and largely by chicken. But while chicken production in Africa has increased from 322,843 tonnes in 1962 to 7.81 million tonnes in 2022, it still does not meet demand. 

To deal with this shortfall, the region imports frozen chicken from countries such as Brazil, the European Union and the USA. Poultry imports to Sub-Saharan Africa were around 1.96 million tonnes in 2021 but are expected to increase to 2.54 million tonnes per year within the next decade. As a result of imports and dumping of chicken products, the once vibrant poultry industry in Ghana, for example, is on the verge of collapsing if not collapsed already. This contributes to explaining why Africa is yet to industrialise despite numerous policies and promises. 

African leaders must stop being naïve – we need to better address these challenges today in order to meet the demands and opportunities for tomorrow. 

One solution is for African leaders to establish an equivocal continental policy to demand that countries grow what they eat and eat what they grow, resulting in the minimisation of external imports from outside of the African continent. This policy could become a hallmark of the African Continental Free Trade Agreement and industrialisation policy.

Secondly, the continent must develop a comprehensive policy to invest in agricultural research and development. The returns on increasing funding for agricultural R&D have great impacts and potential to improve efficiency and food security, reduce the number of people who are malnourished, and ultimately lower the level of poverty through income generation. 

These are the best ways to get the continent on a path to optimising and growing its agricultural sector.

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10 June 2024   •   Agriculture
Chicken importers ignore the facts – yet again

Chicken importers are agitating for a renewal of rebates on import tariffs that applied for the first three months of the year. As usual, their arguments ignore key facts.

Chicken importers are agitating for a renewal of rebates on import tariffs that applied for the first three months of the year. As usual, their arguments ignore key facts.

The importers’ position was set out by Roy Thomas of Hume International, a prominent member of the Association of Meat Importers and Exporters (AMIE).

In an article published by Bizcommunity, Thomas appealed to South Africa’s trade regulator ITAC, which administers the rebates, to extend them for second three months (April to June) and even to apply them in perpetuity for certain products.

Thomas pushed a number of emotional buttons (price, affordability, school feeding schemes and low-income households) but did not address the two conditions – the only two conditions – that are required for the import rebates to be instituted or renewed in order to encourage additional chicken imports.

As set out in the Government Gazette in January and March this year, import rebates may be applied only if there is a shortage of chicken on the local market, and then only if that shortage has been caused by an outbreak of avian influenza (bird flu). Both conditions must be met.

Neither condition applied in January, when those regulations were published, or in March, when rebates for the first quarter were approved. Neither condition applies now, when a renewal of rebates for a further three months is under consideration.

The SA Poultry Association (SAPA) has stated consistently that there is no shortage of chicken on the local market, and that production levels have recovered fully after last year’s devastating bird flu outbreaks. They have provided ITAC with the evidence to substantiate their position.

They have also pointed out that, as there is no bird flu-induced shortage of chicken on the local market – and this is the only legal justification for rebates – to continue the rebates would be unlawful.

Affordability for low-income households, and supplies of chicken livers for school feeding schemes are important issues, but are the subject of a different debate. The rebate regulations focus only on market volumes and whether there is a shortage of chicken caused by bird flu.

While Thomas prefers to focus on price, it is notable that once again there is no undertaking from importers to pass on to consumers any lower costs that might result from reduced import tariffs. So the question is – lower prices for whom?

Importers also do not say that they stand to profit significantly from renewed rebates. Benefits to importers can come in three ways. Firstly, they will earn more money from higher import volumes. Secondly, they will have the opportunity for higher profits by importing at lower prices chicken which sells at, or close to, ruling market prices. Thirdly, what importers are pleading for is a retrospective application of tariff reductions, back to 1 April when the second quarter started. Chicken imported then has probably already been paid for and distributed. 

The rebates were established solely as an incentive for higher import volumes. However, second-quarter rebates applied now will be too late to encourage additional imports for April, May and most of June. What they are more likely to do is give importers a nice fat bonus which will go straight to the bottom line.

No wonder they are so enthusiastic about rebates.

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10 June 2024   •   Agriculture
More bird flu vaccination success

Slow but steady progress is being made in vaccinating poultry against avian influenza (bird flu).

Slow but steady progress is being made in vaccinating poultry against avian influenza (bird flu).

Earlier this year, France reported on a successful pilot campaign to vaccinate millions of ducks. This is the first large-scale vaccination programme tried anywhere in the world, and vaccination has yet to be implemented in any commercial chicken operations.

Now Reuters reports that the Dutch government has announced that two vaccines tested by the Wageningen veterinary research centre have proved effective against highly infectious bird flu in a first experiment conducted under a controlled environment.

“Not only did the vaccines give poultry used in the lab protection against disease symptoms but they also countered the spreading of the bird flu,” the government said in a statement.

One vaccine was produced by France’s Ceva Animal Health and the other by Germany’s Boehringer Ingelheim, an official document on the Dutch government website showed.

Bird flu has been spreading around the world in the past year, killing more than 200 million birds – and six million in the Netherlands alone – sending egg prices rocketing and raising concern among governments about human transmission.

Some countries, including China, already vaccinate against bird flu and as the virus seems to have become endemic, a number of other governments that initially opposed vaccines are now reconsidering. Their opposition centred on fears a vaccine could mask the spread of bird flu but tests indicate it would not be the case with the two vaccines tested in the Netherlands.

As part of a European programme, the Netherlands has been testing bird flu vaccines for egg-laying hens while France is carrying out tests on ducks, Italy on turkeys and Hungary on Pekin ducks.

A field trial will be launched in the Netherlands to see whether the vaccines that work in a laboratory setting are also effective if applied in wider conditions. The trial should take more than a year to give an idea of how long chickens are still immune after vaccination.

In South Africa the SA Poultry Association (SAPA) has appealed to the government to implement a mandatory vaccination programme to avert a potentially disastrous winter outbreak of bird flu. It has also urged an easing of the onerous conditions that must be met before producers will be permitted to vaccinate their flocks.

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