Upward momentum in meat complex as SA heads into winter

This week, Absa AgriBusiness considers the dynamics in the South African livestock industry to explore what prices could look like over the coming weeks.

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Livestock prices are higher year-on-year (y/y). Compared with a month ago, beef prices increased notably throughout April and the start of May, while pork prices remained under pressure, despite improved local demand.

BEEF

South African beef prices saw a long-anticipated increase in April, with Class A carcass prices surpassing the R60/kg mark as the cumulative effect of improved demand conditions, ranging from lower fuel costs to cuts in interest rates, began to manifest in carcass and weaner calf prices.

As a result, Class A and Class C carcass prices increased by 5,8% and 4,6%, respectively, month-on-month (see Graph 1).

Profitability, as measured by the beef-to-maize price ratio, increased notably by 26,3% month-on-month (m/m) as a result of lower yellow maize prices, coupled with the significant beef carcass price increase year-on-year (y/y).

Class A carcass beef prices increased by 25,6% y/y, while Class C carcass prices increased by 20,1% y/y.