Why beef producers are still optimistic about 2025, despite foot-and-mouth disease warning

wHYSouth African beef producers look forward to a profitable year after the industry faces significant challenges in 2024.

The Beefmaster Group says some of the challenges the beef industry experienced in 2024 were due to the country’s low economic growth.

“Slaughter prices continued to fall, input prices such as feed prices continued to rise, and farmers’ calf prices couldn’t get off the ground. The consumer faced significant financial strain, resulting in low spending,” says Gert Blignaut, CEO of the Group.

Beef producers reached highest slaughter figures

He adds that despite the challenges, production volumes showed remarkable resilience.

“It is likely that we reached the highest slaughter figures of the last six years, with about 2.8 million cattle going to slaughter in SA,” Blignaut notes.

However, this increased supply and lower demand due to constrained consumer spending put additional pressure on prices throughout the year.

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

A bright spot for beef producers

Blignaut says a significant bright spot was that in 2024, they exported the highest volume of beef in the last six years, approximately 38,000 tonnes.

However, he emphasises that exports only represent about 5% of production, indicating substantial room for growth.

Beef is a growing commodity

He says research from the Department of Agriculture, Land Reform and Rural Development (DALRRD) revealed that beef is the second fastest-growing commodity in the agriculture sector.

“Expanding export markets remains crucial. Blignaut remains optimistic about the potential for improved export numbers exceeding 5% through collaboration with industry stakeholders and DALRRD.”

Opening of the Saudi Arabian market

He says the opening of the Saudi Arabian market was another positive development in 2024, along with other encouraging factors such as the formation of the Government of National Unity (GNU) and the start of an interest rate reduction cycle, which could stimulate consumer spending this year.

He highlighted how the suspension of load shedding has saved businesses a lot of money, and if this continues, it will help many businesses thrive in 2025.

ALSO READ: Foot and Mouth Disease: Ban on cattle movement lifted

Promises and challenges of 2025

The outlook for 2025 carries both promise and challenges.

“We suspect that, going into 2025, the consumer may start spending more. Possible further interest rate cuts, combined with the current outlook for the year, may mean we could be in a for a better year.”

However, he cautions about ongoing challenges, particularly regarding Foot-and-Mouth Disease (FMD) management.

“FMD is a highly contagious viral disease that affects cloven-hoofed animals and has persisted in SA.

“We are also concerned about drought conditions and how this may impact primary producers.”

Agricultural economist’s view

Wandile Sihlobo, an agricultural economist from Agbiz, believes that the mid-summer drought in 2024 negatively impacted the agricultural sector, leading to extensive crop losses.

At the start of this year, a warning about the uncertainty regarding weather cycles made forecasting and predicting rains difficult.

Despite the warning, Blignaut remains optimistic about the year ahead.

“Primary producers, keep doing what you are doing. Tenacity is a superpower. Hang on, the rain will come.”

NOW READ: Foot-and-mouth disease still a risk for livestock industry