Chicken prices set to increase in SA: Here’s by how much

Poultry price increases are expected to ease in 2024 following high hikes for the past two years.

The Spring Edition of the Absa AgriTrends report shows a stronger rand and production growth by key global suppliers such as Brazil. This could result in the average price of chicken products increasing by just over 1%.

Diseases impact chicken prices

Senior Economist at Absa AgriBusiness says there has been a global shortage of poultry due to the outbreak of diseases such as avian influenza.

Without erasing the possibility of new disease outbreaks, which might impact the price outlook going forward, Louw adds consumers can expect lower feed prices that will improve margins for producers, which could stimulate supply. This is if all things remain equal.

“This could in turn assist in keeping price increases contained over the medium term, which is good news for consumers.” 

ALSO READ: Several plans hatching to mitigate chicken shortage in SA

Supply interruption to have positive impact on chicken prices

The report released on Wednesday also includes that about 20% of local consumption is received through imports, mostly frozen bone-in portions. Louw is of the view that any supply interruption would have a positive impact on price movements.

“In July this year, Brazil experienced a case of New Castle disease and although it was an isolated incident, trade was suspended for 21 days,” adds Louw. To date, chicken accounts for two-thirds of meat consumed in South Africa.

Import of chicken from Brazil

Louw says there are at least 400,000 tons of chicken being imported from Brazil each month, which makes Brazil the key exporter servicing the global market. In 2023, South Africa alone exported more than three-quarters of chicken from Brazil.

“There have been growing calls for chicken prices to be zero-rated, while the importance of food affordability is acknowledged, it is also vital to note that a change of this nature could have unintended consequences.”

An example Louw made is relative price changes of products in the meat complex are likely to alter consumption patterns, which could impact prices and margins of other products in the meat complex.

ALSO READ: Poultry industry divided: Import tariff rebate throws a cat in the henhouse

Class A beef prices increase

The report also covers prices in local livestock markets, which Absa experts believe have shown different trends. “Although moving very gradually, year-on-year price increases in class A beef carcass prices amounted to around 14.5%.”

Their view is that the trends in local livestock markets are underpinned by a recovery in consumer sentiment and disposable income. Pork and lamb price movements fall between the two divergent trends and have been more subdued. “This was in a global context where both of these products experienced large price swings.”

Class-C prices under pressure

The report shows that Class-C prices were under pressure during the second quarter of the year. This could be attributed to an influx of grade C cows from Namibia.

“Average monthly imports since the last quarter of 2022 were, however, around 16,000 head. During February 2024, this number increased to 348 335, which in our view, was a result of herd liquidation in Namibia in response to the hot and dry conditions of the past summer.”

NOW READ: Anti-dumping duties on US chicken imports extended for five more years