La mb and mutton prices hit by consumer resistance

Lamb and mutton prices remained supported by lower sheep numbers, which resulted in lower available supplies to the market, according to Conce Moraba, an agricultural economist at Absa Agribusiness.

She said herd rebuilding had been the main challenge for sheep farmers, particularly those in the Eastern Cape and Northern Cape, who were still facing severe drought conditions.

“As the herd rebuilding process is not happening quickly, it creates limited supply levels, causing lamb prices to remain high,” said Moraba. This resulted in the average price for October being 16% higher than the three-year average.

Karabo Takadi, also an agricultural economist at Absa Agribusiness, said consumers were showing some resistance to the higher price as lower economic growth and higher fuel costs contributed to the higher cost of living, which placed a damper on consumer spending. This was particularly true of lamb and mutton, which remained niche products that were more expensive than other meat varieties.

This resulted in the average Class A price for lamb coming under pressure during October, declining month-on-month to R73,37/kg. Further price pressure in November resulted in prices struggling to reach the R72/kg level, she said

Although red meat prices traditionally strengthened leading up to December due to seasonal demand, prices were following a different trend this year, she said.

Takadi said that although prices had struggled to show significant strength in the past weeks, mutton and lamb prices were expected to recover in the short term, in line with seasonal trends and improved demand into the festive season.

South Africa is a net importer of lamb and mutton, with most of the supplies imported from Namibia, Australia and New Zealand.

“Our [export] destinations are mainly SACU countries [Lesotho, Botswana, Swaziland and Namibia]. Imports have come under pressure since the drought in 2015/2016, with the total fresh, chilled or frozen goat meat, mutton and lamb volumes having declined to [about] 6 500t in 2017 from [about] 8 800t in 2016, and 10 700t during 2015,” Moraba added. – Siyanda Sishuba

Fw archive LEFT:The price of lamb is set to remain high as post-drought herd rebuilding continues.