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Bad news for BRAAI lovers

barri

Shopprice South Africa

 

Braai-loving South Africans face higher prices for lamb chops and steaks for at least two years as worst drought since 1992 dries up the county’s grasslands.

While farmers are currently selling and slaughtering more livestock than usual to protect grazing and generate cash for feed, a supply shortage is expected from April, which will raise meat prices then, Pieter Spies, the managing director of agribusiness GWK., said in an interview in Douglas in the Northern Cape province.

boerewors-on-braai

“There’s proper supply at the moment but come the second quarter of next year, there is going to be a shortage of livestock,” Spies said. “The cycle will take two years to bed down after good rains – it could even take longer – it all depends on how depleted the flocks will be.”

GWK’s warning on prices for lamb and mutton follows a forecast by South Africa’s Red Meat Producers’ Organisation that farmers may kill 36 percent more cattle this year than planned as slaughters in the water-scarce KwaZulu-Natal province surge.

Food inflation may accelerate to above 10% by the middle of next year, more than double the current pace, as the effects of dry weather on prices from corn to meat are being compounded by the rand’s 19 percent plunge against the dollar this year, Stanlib Asset Management and Macquarie Group said last month.

The company will slaughter about 800 000 sheep and 70 000 cattle at its abattoirs in the Northern Cape, which is the nation’s second-biggest bovine-farming area, Spies said. GWK has 25 percent of the broader meat market in the region, he said.

“The challenge is that the market is not ready to pay the prices at the other end,” Spies said. The producers “are under pressure, both from a retail-price perspective and the ever- increasing feeding costs.”

Local prices of yellow corn, used mainly as animal feed, have surged 55 percent since the start of the year, while the white variety, which is the base of a staple food known as pap, has increased 65 percent.

A strengthening El Niño pattern that brings dry conditions to the sub-Saharan region has prompted the South African Weather Service to predict below-normal rainfall for the next four months.

Any price shocks may hurt consumers already facing job cuts and higher interest rates, further dragging down an economy that narrowly missed falling into recession this year.

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