Market Pulse | High meat prices drive up food costs

The latest consumer price inflation (CPI) update from Statistics South Africa shows a further deceleration in food inflation for the second consecutive month to 4.4% year-on-year in September 2025.

By Maile Matsimela, Digital Editor at African Farming

“We’re seeing this improvement underpinned by a slowdown in vegetables, fruits and nuts, oils and fats, and milk, other dairy products and eggs categories,” explains Paul Makube, Senior Agricultural Economist at FNB Commercial. “Monthly, the food CPI remained in deflationary mode after decreasing by 0.4% month-on-month in September from -0.1% month-on-month in August 2025.”

However, elevated meat prices continue to present challenges for overall food inflation. “Meat prices are really the outlier here, clocking a seven-and-half year high of 11.7% year-on-year and edging 0.5% month-on-month in September 2025,” Makube notes.

The foot-and-mouth disease outbreak has been a significant disruptor. “Again, the foot-and-mouth disease outbreak’s disruption to the red meat value chain underpinned the further spike in meat inflation in September 2025,” says Makube. “Reduced livestock slaughter in the cattle and sheep categories curtailed the availability of product on the market, hence the aggressive pricing.”

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The impact on livestock numbers has been substantial. “Although updated with a lag of two months, cattle slaughter numbers for the three-month period to August 2025 fell by 9% relative to the previous period and were down 10% year-on-year to 626 587 head,” Makube explains. “Similarly, the number of sheep slaughtered fell by 13% during the June-August period to 1.05 million head, which is 9.9% lower year-on-year.”

Looking ahead, Makube expresses concern about the festive season. “Given the continued challenges with FMD, we expect the slaughter trend to continue to trail the 2024 levels as we head into the festive season, which poses upside risk to prices.”

The pig industry has shown more resilience. “Pigs were however less impacted, with slaughter numbers still trending in line with the previous two years,” notes Makube. “The total number of pigs slaughtered for June-July 2025 were 1% higher relative to the previous period at 661 468 head, which is 2.2% above the same period in 2024. The year-to-July 2025 pig slaughter is however marginally down by 0.2% year-on-year at 2.26 million head.”

Regarding poultry, Makube observes mixed trends. “In the case of chicken, the average weekly domestic broiler production for the first half of 2025 was marginally down by 0.7% relative to the same period last year to an average of 21.15 million per week.” Import trends have been more dramatic: “Meanwhile, chicken imports for the three-month period to August 2025 fell by a whopping 54% relative to the previous period and were down by 46% year-on-year at 46 081 tonnes. Chicken meat imports for the year-to-August 2025 were pegged at 192 381 tonnes, which is down by 31% year-on-year.”

Global Context

Makube places South Africa’s situation in global context: “Globally, food inflation as measured by the United Nations’ Food and Agriculture Organization remained in deceleration mode after slowing to 3.4% year-on-year and falling by 0.7% month-on-month in September 2025, underpinned by declines in cereal, dairy, sugar, and vegetable oil indices.”

However, the global meat story mirrors South Africa’s challenges. “Meat inflation was an exception after rebounding to 6.6% year-on-year in September 2025 from 4% in August and edging up 0.7% month-on-month from 0.2% in the previous month,” explains Makube. “Gains in ovine meat at 30% year-on-year, bovine meat at 15.5% year-on-year, and pig meat at 1.5% year-on-year more than offset the falling poultry meat prices, which remained in negative territory for the third consecutive month after posting a -5.8% year-on-year in September 2025.”

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Relief for Livestock Feeders

There is some positive news for livestock producers. “Livestock feeders can breathe a sigh of relief as grain prices weaken further,” says Makube. “A combination of a decent harvest and a stronger rand exchange rate continued to place downward pressure on grain and oilseed prices.”

The numbers are encouraging. “Average yellow maize and soybean prices for the first four weeks of October 2025 show a decline of 22% and 20% year-on-year respectively at R3 457 per tonne and R6 946 per tonne,” Makube reports.

Future market indicators are also positive. “In the futures market, the yellow maize prices for 26 July delivery already showed modest decreases relative to the R4 000 per tonne level recorded last year,” he notes. “Similarly, the strong harvest pressured the soybean market, which saw the May-25 futures falling below the R8 000 per tonne levels achieved in 2024. This is obviously a positive development for livestock feeders in terms of a further reduction in feed costs.”

Outlook

Looking forward, Makube remains cautiously optimistic about certain aspects while acknowledging ongoing challenges. “Although beef prices eased from the 2025 record highs, they remain well above the 2024 and long-term averages respectively, which should sustain profitability in the medium term.”

He highlights the benefits of lower feed costs: “A decline in raw feed input prices, particularly maize and soybeans, bodes well for improved profit margins for intensive livestock feeding operations.”

Seasonal factors will continue to play a role. “With high seasonal demand around the corner, livestock prices are expected to retain recent upside in the short to medium term,” Makube predicts.

Finally, addressing the root cause of many current challenges, Makube emphasises the urgent need for resolution: “The resolution of the FMD situation in the country is long overdue, and hopefully, recent strides at vaccination and procurement of vaccines will normalize the situation in the medium term.”