Outlook for the red meat industry

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

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.