Finweek English Edition - - Economic trends & analysis - JO­HANN VAN ZYL

THOUGH MEAT PRICES are lower now than in De­cem­ber, the long-term trend – ac­cord­ing to lo­cal and US in­dus­try lead­ers – re­mains sharply up­wards.

Meat prices, which rose by as much as 40% in SA last year (de­pend­ing on the cut and the lo­cal­ity of the mar­ket), have fallen about 20% since the be­gin­ning of Jan­uary. Though lower prices are nor­mal af­ter the sea­sonal up­turn in De­cem­ber, Gary Moor­croft of auctioneers Epla says a higher num­ber of cat­tle farm­ers are be­ing forced to sell be­cause the drought has de­pressed prices fur­ther.

When farm­ers build up their herds again and prices start ris­ing in line with world­wide in­creases in the prices of agri­cul­tural prod­ucts, they could again show above-av­er­age in­creases.

Ac­cord­ing to the SA Meat In­dus­try Com­pany (Safic), the US De­part­ment of Agri­cul­ture (Usda) ex­pects a longterm de­cline in per capita con­sump­tion be­cause prices are ris­ing so sharply. The in­creas­ingly ex­pen­sive maize (it’s be­ing used more and more for ethanol pro­duc­tion) and other feed cost in­creases will, ac­cord­ing to Usda, sim­ply be passed on to the con­sumer.

Univer­sity of Pre­to­ria agri­cul­tural econ­o­mist Ferdi Meyer says SA will be see­ing a “sharp in­crease in food prices”, in line with the high world prices and as a re­sult of the poor har­vests. This means maize prices, which have risen more than 200% over the past year or two, could es­ca­late, which will, of course, fil­ter through to feed prices and in the end mean above-av­er­age meat prices.

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