As braai season approaches, red meat prices are expected to increase by between 9% and 15% between now and December due to tight supply and increased demand from consumers during the festive season, First National Bank (FNB) has cautioned.
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 rain materialise.
Paul Makube, senior agricultural economist at FNB, said red meat slaughtering had been substantially higher this year compared with the past three years as a result of the drought.
For example, the cumulative sheep slaughter number was currently 111% and 69% higher than the 2015 and 2014 levels, respectively.
But despite that increase, the country did not experience an oversupply of meat, which would have resulted in lower prices, due to exports.
“In terms of the outlook for beef, we are heading into a seasonal price increase of between R3.4 and R5.7 per kg for Class A beef as braai season returns. Consumers who prefer to braai lamb can expect to pay between R5.60 and R9.40 per kg more for Class A lamb over the festive period,” says Makube.
Pork will also benefit from the price gain of red meat. But there won’t be much movement in poultry due to increasing imports.
Despite pressure on disposable income, consumers will still be able to absorb a slight increase in meat prices during the festive period. Others will opt to purchase red meat in bulk, Makube said.
“Even during tough economic conditions, we have seen consumers cut back on luxuries, but generally spend more on food and meat.”