The poultry industry will benefit from low feed costs, as well as higher broiler and egg prices, according to a recent Absa Agri Trends report.
“Grain prices remain low due to high stock levels, and prices are expected to trade[flat], which continue to keep feed prices low,” the report said.
Speaking to Farmer’s Weekly, Marthinus Stander, CEO of Country Bird, said it could be assumed that the industry would benefit from lower feed prices for at least the next year.
“The exchange rate [ofthe rand against the dollar] influences price to a large extent, but we have enough maize locally, so we don’t have to import, and we’re expecting another good maize crop,” he said.
According to the Absa Agri Trends report, strike action by truck drivers in Brazil saw thousands of tons of poultry prevented from leaving ports to be exported to South Africa.
Nonetheless, some of this poultry was still en route to the country, but the ‘lag effect’ meant that imports would slowdown and take sometime to pick up again.
Small-scale producers would also benefit from lower feed costs as they bought feed on a ‘cost plus basis’, Stander said.
DUMPING HAMPERS LOCAL INDUSTRY GROWTH
While consumers’ buying power was being eroded by increasing costs such as fuel, white meat remained the cheaper protein choice on the market, which could increase consumption.
However, the report also explained that prices were currently subdued due to a slowdown in consumer spending. Stander added that he believed that South Africa’s poultry industry could meet all local demand and create jobs, which would also have a knock-on effect for grain producers.
However, continued dumping of “spare parts” by foreign producersmeant that the industry could not meet its full potential.
– Gerhard Uys