Who will take care of us?

WHAT comes first: the chicken or the egg? The answer could in fact be Astral Foods.

In the world of chickens, they are godlike. By the time an egg is laid, their hand has already ensured it has the right genetics.

Then, once a chick is born, good nutrition and farming practices are used to ensure it becomes the best possible chicken.

The god of humans has produced a fair number of individuals that many would rather forget. But Astral Foods does not have that problem.

Their chickens are sought after and their brands are found in almost every supermarket fridge. Many of South Africa’s biggest and most popular fast food outlets also use their chickens.

It is no wonder that Astral Foods is now South Africa’s largest integrated poultry producer. It is also listed on the JSE and, as a result, is obliged to keep shareholders up to date on the company’s financial position.

Its latest results, as of March 31, reflect a reality that every South African can relate to – costs are soaring. In the case of Astral Foods this is due to higher prices for chicken feed, load shedding and failing municipal infrastructure.

The result is that a once-profitable company went from having just over R700 million cash in the bank at the end of September last year to having a R500m overdraft at the end of March this year.

What’s concerning is that the company does not think things will get better any time soon. According to Astral Foods: In the lead-up to the 2024 national elections a period of political instability is expected, as well as both policy uncertainty and poor service delivery from the government. The macro-economic crisis in the country with negligible to no economic growth is hampering any prospects for job creation, with disposable income under severe pressure as the cost of living crisis deepens and a recession looms large. Failing infrastructure and the lack of service delivery from a “government that is asleep at the wheel” is placing a massive cost burden on businesses and the consumer alike. The dramatic demise of Eskom in the generation and distribution of electricity, of Water Affairs and the failing water supply networks, together with the disastrous state of Transnet, have destroyed the capacity of the agricultural sector to function efficiently which has hence become globally cost uncompetitive.

The continuous costly disruptions to agri-processing businesses and the integrated food production value chains have left South Africa with deepening hunger and poverty levels, especially among the most vulnerable of communities, and an even greater threat to food security is plausible.

The coming months will be tough for Astral Foods. But their birds will be well fed and kept warm thanks to the interventions the company has made. This includes R741m to keep the lights and machines on when Eskom can’t.

Meanwhile, all that the rest of us can do is pray that we can put food on our plates and stay warm when the lights go out.