Chicken Industry

Chicken meat imports dominate the South African poultry market

South Africa’s imports of chicken meat continue to increase as the local market is affected by high feed costs. Meanwhile, the South African government continues to evaluate the South African Poultry Association’s request for an increase in the import tariff of between 12 and 37% to 82%.

Following the devastating droughts coupled with the outbreak of highly pathogenic avian influenza (H5N8) and a listeriosis food scare, the broiler industry recovered in 2018, increasing production by 6% to a record of 983 million broilers slaughtered, according to a recently published USDA Global Agriculture Information Network (GAIN) report.

Economic worth of poultry industry

The broiler industry is South Africa’s largest individual agricultural industry boasting a gross value of about US$3 billion and contributing about 17% to the total gross value of agricultural products. Commercial broiler meat production accounts for approximately 90% of the chicken meat industry, with the remaining 10% comprising subsistence farming production and depleted flock. The 983 million broilers slaughtered in 2018 equalled 1,27 million tonnes of chicken meat (excluding offal). If depleted flock and subsistence farming production is added, South Africa’s total chicken meat production for 2018 is calculated at 1,41 million tonnes, a 5% increase from 2017. A 1% decrease in chicken meat production is estimated for 2019 to 1,40 million tonnes.

High feed costs – a 70% contribution to the total cost of a broiler producer – constrained consumer demand and an expected decrease in exports are putting downward pressure on producer prices. As a result, broiler producers are expected to reduce production to 970 million broilers slaughtered in 2019. In 2020, chicken meat production is projected to increase by 2% to 1,42 million tons, under the assumption of normal weather conditions.

Reproduced courtesy of BizCommunityRead the full article here.