Happy days are here again for agricultural sector after drought ends

SOUTH Africa’s agricultural sector can look forward to a positive outlook for livestock prices with higher meat prices, lower feed costs and favourable grazing conditions.

This comes as the JSE announced that it would work with Cape Wools SA to introduce a cash settled merino wool futures contract.

An Absa agricultural trends report said the underlying instrument for wool futures would be Merino fleece wool as captured on the index basis.

The report said the futures contract would be cash settled with no physical delivery.

Absa AgriBusiness economist Karabo Takadi said beef prices on the domestic front recorded good gains over the past week with Class A prices 0.03% higher at R48.41/kg and Class C prices 0.74% higher at R37.80/ kg while the average weaner calf prices over the past week were 2.5% higher at R31.05/kg.

Takadi said average calf prices increased to R31.05/ kg on the back of improved demand and less available supplies as fewer cattle were being slaughtered now because of improved rains in most parts of the country.

She said the domestic outlook for beef was that scarce supplies may continue to add upward support to prices but demand may taper off after the Easter holidays which may limit price increases.

Takadi said poultry prices had also improved .

“In terms of beef prices, we don’t see beef prices coming down.

“General beef prices will remain high.The beef industry should remain supported.”

She said 60% of the beef was imported from Namibia, which led to a shortage and higher prices as a result.

She said livestock in general was benefiting from the high grain expectancy which means feed will be low.

Feed prices had declined by about R3 000 a ton because of better grazing conditions.

Takadi said the import side of things remained a challenge but exports would bring more opportunities for the sector.