This past year, 2016, will go down in history as one of the most difficult ever for the poultry industry. The worst drought in many years started it all, and it was downhill from there. The drought resulted in high grain prices, which translated into high feed prices. This would not have been too bad were it not for the deterioration of the local currency coupled with high oil prices. All these led to very high production prices, which would not have been critical were the producers able to recover these costs by increasing farm gate prices. However, as we all know, retailers would have none of it. The farm gate prices didn’t escalate as quickly as the production costs - even to this day. Dare we forget about the unprecedented high levels of imported broiler meat, which didn’t only make life difficult for the broiler producers, but also for egg producers as they were not able to realise good prices from the sale of spent hens.
It is therefore no surprise that as many as 12 000 direct and indirect jobs are at stake, leading to the Food and Allied Workers Union (FAWU) seeing it fit to take their grievances to the European Commission, as various appeals to the South African government have not yielded the desired results. The minister of Agriculture, Forestry and Fisheries has a target of creating 1 million jobs in agriculture. At the current attrition rate, this remains but only a dream. In order to meet this target, the industry needs to create - and not shed - jobs.
We live in hope that we can put 2016 behind us and look forward to 2017 with enthusiasm and high levels of energy. The year ahead promises to be a very good one, with a few of the initiatives coming to fruition from both the egg industry and transformation. In the egg industry, 2017 will see us driving the following initiatives:
Egg Industry Global Competitiveness Study
There are many misconceptions about the competitiveness of the South African Poultry Industry. Most consumers believe that the reason for high levels of imports is because the industry is not able to produce chicken at competitive prices. However, the study conducted by the Bureau for Food and Agriculture Products, proved that this is not the case. South Africa is more efficient at producing poultry meat than all of the European countries. To this end, SAPA has engaged BFAP to conduct the same exercise for egg production. We hope to have the results of the study by the end of the first quarter of 2017.
Egg Levy Application
By now the financial woes of the egg industry are not breaking news. The egg industry has been struggling under the immense apathy