Beef carcass prices began recovering in the second quarter of this year. According to Absa’s latest market trends report, prices are not expected to fall back to 2024 levels anytime soon.
By Alani Janeke, Senior Journalist at African Farming and Landbouweekblad
The recovery in beef carcass prices this year has been supported by improved household income in the country, partly caused by reductions in fuel prices and a 125-basis-point decrease in interest rates since the second half of last year.
“The recovery was accelerated by the rapid spread of foot-and-mouth disease, which limited supply and caused a sharp price increase,” says Nkhensani Mashimbyi, agricultural economist at Absa Agri. She unveiled Absa’s latest market trends report at Nampo Cape on Thursday.
“This momentum is expected to continue and be strengthened by the seasonal upswing in demand, which typically accompanies the festive season. Prices (to farmers) will likely not return to 2024 levels in the near future,” the report states.
“However, beef remains highly price-sensitive, and increased prices typically lead to a shift in consumer demand to more affordable alternatives, such as poultry and pork.”
Also read: Beef prices resilient despite load-shedding and consumer pressure – Absa AgriTrends Report 2024
What is Expected for Weaner Calf Prices?
Weaner calf prices are at stronger levels than expected amid lower demand for weaner calves (due to, among other things, the foot-and-mouth disease outbreak). This is attributed mainly to effective procurement strategies, including quarantine guidelines that must be followed to keep weaner calves separate from a herd before feedlot integration can take place. Additionally, it should be noted that agricultural conditions have improved, causing farmers to retain weaner calves to build their herds, and thus slaughter numbers are lower than in 2024, when they were very high due to drought conditions, among other factors.
“As herd rebuilding efforts gain momentum, we expect upward price support for weaner calves due to limited supply and steady demand.”
However, the risk posed by current disease problems could counteract some of the gains associated with lower weaner calf inventory, warns Absa Agri.
Read the livestock report.
Read the full report.
