Meat prices are climbing fast - here's what you should plan to braai in December
- Demand for meat is exceeding current livestock slaughtering volumes, even though they are relatively higher than the previous year.
- The price of beef broke through the R50/kg mark for the first time and is 15% more expensive than 2019 levels.
- Chicken remains the cheapest source of animal protein and you’ll pay less if you buy a whole fresh bird.
- For more stories, visit www.businessinsider.co.za.
Buying meat this festive season is going to be more costly for consumers as the demand for meat exceeds the country’s livestock slaughter rate, pushing prices up.
According to Paul Makube, FNB’s senior agriculture economist, a high slaughter rate would have pushed down prices for meat, but a solid demand for meat has sent meat prices soaring.
Meat inflation, which increased 4.4% year on year during September 2020 in the last Stats SA release will remain on the upside, he said.
He added that the number of slaughtered livestock has been stronger relative to the previous year with cattle, sheep and pigs slaughtered above the 2019 levels.
When compared to other meat types, chicken won’t break the bank as it is often the cheaper option. While it’ll cost you less to buy a fresh whole chicken at R25,38 cheaper than in 2019, a frozen whole bird will cost you R25,63 and IQF (Individual Quick Freezing) chicken R24,26 more than last year.
Makube said higher feed costs necessitate chicken being priced on the upside in line with red meat but said the cheaper source of animal protein was being sold at a loss given the competitive trading environment.
Prices of pork have increased as much as 15%, sending the price to R30 per kilogram. For bacon, you will pay 9% more than in 2019. This is as a result of the resilient demand for the meat type as well as tighter volumes. Volumes for pork and bacon are 37% and 36% higher than last year respectively, relative to the 3-year average for this time of the year.
Makube said the current uptick in prices for pig carcasses will continue to be underpinned by a renewed demand as we approach the festive season. He warned that rising maize prices and higher feed costs will affect prices in the short term and will likely reduce producer margins.
Buying a kilogram of A grade meat will cost you R50, over 15% more than its price in 2019. The meat type breached the R50 per kilogram mark for the first time.
“Good grazing conditions due to rains in some areas bodes well for prices in the medium term as producers will hold on to stock for a bit longer. However, other areas are yet to recover fully as evidenced by recent fires in parts of the Free State,” Makube said.
The current strength in beef prices is likely to be maintained as we head closer to the festive period. Nonetheless, farmers wouldn’t necessarily smile all the way to the bank as the combination of the relatively high weaner calve prices and the elevated grain prices squeeze feeding margins in the short term.
If you prefer lamb or mutton on your Christmas menu, you’ll have to dig deeper into your pocket with prices having increased by 28% to R88 and 40% to R66 respectively. Lamb and Mutton volumes are 15% and 16% above the 3-year average for this time of the year.
“We expect prices to retain the sideways trend but with further upside in the short term on improved seasonal demand. The post-Covid-19 long term demand outlook, however, remains a concern given the high prospects of the weak economy and subsequent contraction of job numbers,” Makube said.
Receive a daily news update on your cellphone. Or get the best of our site emailed to you.
Go to the Business Insider front page for more stories.