20 September 2023
By: Alani Janeke
Weaner calf prices may move “modestly upwards” in the coming months, with a potentially strong average price around the festive season, economists said at Nampo Cape.
Load-shedding, especially at the higher levels South Africa has recently experienced, can have a long-term impact on meat prices and weaner calf prices.
Marlene Louw, chief economist at Absa Agri, told a Nampo Cape media event that the latest Absa Agri Trends report showed meat prices decreasing for farmers as load-shedding levels increase.
Louw said her understanding was that the delay in the repair work at Koeberg nuclear power station meant high levels of load-shedding are expected to continue until November.
This could influence meat prices because load-shedding causes a bottleneck within the value chain from the farm gate, through the abattoir where meat must be cooled and processed, to the retailer and the consumer.
However, she is optimistic about meat prices for farmers by the end of the year. “We expect a modest upward movement, with demand potentially rising seasonally for the festive season. We can expect a price of R36/kg for weaner calves.”
El Niño and veld fires
Weather is one of the factors that will play a role in meat prices for the rest of the year, said Dawie Maree, head of information and marketing at FNB Agriculture.
The expected El Niño system and its impact on farmers’ grazing land could determine how many animals need to be marketed.
Another factor is the severe veld fires in the central interior in recent months and the impact they have on the land’s ability to recover and, consequently, farmers’ ability to feed their animals.
“Load-shedding will definitely have an impact on the delivery of meat, especially for smaller abattoirs, but it should not have the same influence as the load-shedding crisis of the 2022 festive season,” Maree said.
“Taking all these and other factors into account, I estimate that weaner calf prices could return to R34/kg or R35/kg by the end of the year.”
Farmers’ plans
Nico Uys, chairman of the Red Meat Producers’ Organisation in the Western Cape, encouraged farmers to hold on in the difficult economic climate.
“Things are tough on the farmers’ side, but also on the consumers’ side. We will have to do our part to ensure that we deliver high-quality cattle that can achieve the right prices in the midst of everything.”
Uys said one of the factors influencing meat prices in the province is that many farmers in northern areas are still rebuilding their herds after years of severe drought.
The impact of load-shedding and high fuel prices on the entire value chain, and ultimately on the consumer’s purchasing power and buying decisions, should also not be overlooked.
“Unfortunately, we are in a situation where consumers are under increasing pressure. We hear it daily in the news and also experience it ourselves in what we consume.
“My father has always said that in difficult and pressured times, one should not make drastic changes. Stick to what you know and are good at. At some point, the wheel will turn in our favour again. Keep your courage. Farmers must remain optimistic and look forward. As they say, there is always light in the dark. Your plans just shouldn’t run out.”