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Outlook for the red meat industry

Farmer's Weekly

|

October 27, 2023

Livestock product prices will remain at current levels, with some upwards movement possible for lamb, while expected lower grain prices will improve profitability of intensive livestock.

- Dr Koos Coetzee

Outlook for the red meat industry

Grade A carcass beef prices decreased by 25% since the beginning of 2023 and weaner calf prices by 13%.

The main reason for the decrease in prices in spite of the primary sectors still being in a herd-building phase and the negative impact of foot-and-mouth disease on some feedlots, is the weaker consumer demand caused by higher inflation, the highest interest rate in years and the impact of load-shedding on the value-chain and on consumers.

Households’ final consumption expenditure decreased annually by 1% in the second quarter of 2023 after weak growth of 1,4% in the first quarter. The participants in the Economist of the Year competition on average expect 0,9% growth in consumer expenditure in 2023.

Consumer debt and debt service cost both increased. Consumer debt decreased from 85% of consumers’ disposable income in 2008 to 62% in the second quarter of 2023. Debt service cost decreased from 10% of disposable income in 2009 to 7,3% in 2022. It increased to 8,8% in the second quarter of 2023. Unemployment is at a nonsustainable level of 32,9% if measured with the official definition that excludes discouraged, workless people.

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Hampshire Down: mutton sheep fast gaining in popularity

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