Foot-and-mouth outbreak is pushing meat prices up

In this week's column, Absa AgriBusiness considers the dynamics in the livestock industry to explore what price trends could look like in the months ahead.

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Biosecurity concerns have become a central focus in the livestock industry over the past weeks, both locally and internationally.

The combination of local supply disruptions for beef and the ban on Brazilian chicken imports are expected to drive livestock price increases over the coming months.

BEEF

The beef sector has been in the headlines due to the detection of foot-and-mouth disease (FMD) at Karan Beef’s feedlot in Heidelberg. Karan is South Africa’s largest producer of beef and the largest purchaser of weaner calves. It is important to note that the total production capacity of the company is not affected by the outbreak.

The outbreak will, however, affect market conditions in the form of lower demand for weaner calves, which would weigh on prices, and higher carcass prices.

Sources note that the timeline of the FMD disruption could range from eight to 16 weeks. The announcement of a vaccination strategy by the Department of Agriculture could limit the disruption and help to control further outbreaks.