Good news for meat lovers in South Africa
South African consumers are catching a big break, with food price inflation finally easing to sustainable levels – and high-cost items like meat showing some much-needed drops in pricing.
According to the latest food inflation analysis from the Bureau for Food and Agricultural Policy (BFAP), meat prices are up slightly globally, but in South Africa, there’s a more positive trend, especially with chicken prices, which saw a significant surge at the end of 2023 and early 2024.
Global meat prices of ovine, pig, and bovine meat increased in the last month, offsetting a decline in poultry, the group said.
As a result, month-on-month meat indices remained largely unchanged.
“Poultry prices dropped (-2.0%) due to the large supply from Brazil. Conversely the price of ovine meat increased (3.3%), due to strong import demand despite sufficient export supplies as Australia remains in a herd liquidation cycle,” it said.
Pig prices rose (0.5%) due to seasonally busy internal sales and the constant pace of imports in North America. Bovine meat prices remained broadly stable, reflecting balanced global demand and supply conditions.
In the South African meat market, beef carcass prices increased slightly by 0.6% MoM and by 5.1% YoY. Despite cattle slaughters in May 2024 dropping by 8% compared to May 2023, year-to-date (January to May) cattle slaughters show an improvement from 2023, with an 8% increase.
“This would suggest that the marginal gains in prices result from increased export activity,” the BFAP said.
Weaner prices dropped by 3% MoM, reflecting strained margins at feedlot level amid high feed prices.
Pork prices remained fairly unchanged MoM, with a 0.1% increase, while increasing by 5.9% YoY.
Poultry prices for Individually Quick Frozen (IQF) pieces continued their downward trend following the high prices experienced in late 2023 due to the Highly Pathogenic Avian Influenza (HPAI) outbreak.
“As production normalizes, IQF prices dropped by 14.0% YoY, from R33.68/kg in June 2023 to R28.97/kg in June 2024. This reflects stronger production, as well as weak consumer spending power and a marginally stronger rand, which reduces the cost of imported products,” the group said.
Looking at food inflation, the group said that deflation (prices reducing) could be seen in most categories of meat.
This includes:
- Beef: rump steak, T-bone, mince, fillet, stew
- Pork: Chops, bacon
- Mutton: Rib chop, leg, neck, stew
- Chicken: whole
This shift in fortunes for meat lovers is also broadly reflected in the latest Bloomberg Braai Index, which showed that the cost of having a braai – meat, pap and salads included – is also getting cheaper, with costs declining around 2% year on year.
Sticky food inflation has been one reason the Reserve Bank has been hesitant to ease interest rates over the past year, but indications from various sources point to food and non-alcoholic beverage inflation finally coming to a rest.
The BFAP’s tracking over overall food NAB inflation shows that South Africa is firmly “over the hill” in this context, with food NAB coming in at 4.6% in June, versus headline inflation at 5.1%.
This trend is expected to continue, which should ease pressure on core inflation and help convince the SARB to cut interest rates as soon as September 2024 as the country moves more sustainably towards headline inflation settling at the mid-point of its target range at 4.5%.
Loading ...
