All three of South Africa’s listed poultry companies have warned of the high risks of renewed bird flu outbreaks and complained of the lack of progress in government approvals for a vaccination programme.
The poultry industry is recovering, somewhat slowly, after a disastrous 2023 when the the industry was hit by the worst bird flu outbreak in the country’s history. While producers hope to avoid a repetition, they remain fearful.
Bird flu outbreaks tend to be worse in the winter months, which are now approaching. No vaccinations have taken place because the government is insisting on requirements which companies say are too onerous and too costly. Negotiations have so far produced no compromise.
Three poultry companies are listed on the Johannesburg Stock Exchange. They are Astral Foods and Rainbow Chickens, South Africa’s first and second largest chicken producers, and Quantum Foods, the country’s major egg producer which also has a sizeable broiler chicken business.
They have all told shareholders that avian influenza (AI or bird flu) is a serious potential risk to their business operations this year.
Reporting interim results in March, Rainbow detailed the steps it had taken to reduce the bird flu risk, including best-practice bio-security enhancements and relocating “in record time” its Midrand breeding facility to a less densely populated region.
“While the Government has provided a protocol for AI vaccination, the cost and conditions are prohibitive for both the table egg and chicken industries and requires urgent reconsideration by the State,” Rainbow said.
Both Astral and Quantum reported interim results this month. Astral stated briefly that “Bird flu remains a major risk to the local poultry industry, with little progress towards approval for the vaccination of poultry breeding stock”.
Quantum was more expansive, stating that the risk of a bird flu outbreak is regarded as “very high” for the remainder of the financial year. It noted increased bird flu outbreaks in the United States, Europe, North Africa and West Africa.
“The stringent protocols for voluntary vaccination against HPAI published by the South African government remain prohibitive, with, to the best of the Company’s knowledge, no producers having been successful in their applications to vaccinate poultry.
“In the absence of vaccination, HPAI will remain a key risk factor that will continue to affect poultry businesses going forward, resulting in major uncertainty for the poultry industry, which could severely impact earnings,” Quantum said.
Its risk reduction strategy included reducing the number of layer birds in higher-risk geographical areas and sourcing layer hatching eggs from a larger number of geographically diverse breeder farms.
Bird flu continues to sweep through poultry producing countries, and has been reported for the first time in Brazil, the world’s largest poultry producer. The winter months will be a nervous time for South Africa’s chicken farmers.
