Favourable prospects for livestock industry, despite uncertainties

This week, Absa AgriBusiness explores some of the major factors that could have a bearing on price direction and profitability in livestock markets over the coming months.

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During 2024, red meat markets traded in a close band (see figure below) and profitability was under pressure. Lethargic price growth was the result of multiple factors, ranging from animal disease to ongoing pressure on consumer income. As 2025 picks up speed, the question is whether these conditions will continue to hold throughout the year.

INTEREST RATE AND INFLATION

Interest rate cuts provided much-needed relief to consumers in 2024, as numerous central banks around the globe embarked on a cutting cycle. On 30 January 2025, the South African Reserve Bank cut the repo rate by 25 basis points to 7,5%. Initially, analysts were of the view that there could be room for a deeper cutting cycle, but international developments, specifically relating to new policies implemented by the US administration under President Donald Trump, hold upside risk for global inflation.