In the second quarter of 2022, the real Gross Domestic Product (GDP) of South Africa fell by 0.7%. Agriculture, forestry, and fishing contributed the most to the decline, the decline in animal product production was a major factor.
However, compared to the second quarter of 2021, the industry shrank by 20.9%, according to the Bureau of Food and Agricultural Policy (BFAP). This comes on the heels of a poor summer agricultural harvest and a significant increase in input costs, which more than offset income gains. This is according to Business Tech.
The animal products sub-sector contributed the most to agricultural revenue in the second quarter, with revenue increasing by 19% compared to Q2 of 2021. According to the agency, field crops decreased by 14% compared to the same period of analysis in 2021, while the horticulture sub sector decreased by 11% in Q2 of 2022 compared to the same period in 2021.
During the same time period, sheep slaughter decreased by 6%, while cow slaughter increased marginally by 2%. Although the price of pork fell by 7%, the increase in slaughters countered the price decline, resulting in an increase in industry revenue of 15% year-on-year, according to the report.
According to BFAP, chicken remains a cheap source of animal protein. “The gross value of production for chicken increased by 15%, eggs increased by 26% in the second quarter of 2022 compared to the same period in 2021, primarily due to price increases,” the association added.
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It is also important to note that the high prices realised in the field crop sector are crucial cost drivers for animal goods that rely largely on feed. “As a result, while revenue from animal products climbed by about 20%, the sector is facing huge cost pressures, limiting GDP growth.”
Global interruptions to commodities supplies, such as the war in Ukraine, have impacted the agriculture sector as a whole, as have logistical issues as economies recover from the epidemic.
Despite a 6% increase, chicken is still significantly cheaper than several beef substitutes and ham.
USDA Study
In a study of South Africa’s agriculture economy, the US Department of Agriculture, in partnership with the Global Agricultural Information Network, discovered that consumers are expected to eat 2% more chicken in 2023.
It is less expensive than other meats, which may sway middle-class customers toward this protein source, according to the survey. “Although pig may compete with chicken in terms of pricing, a considerable portion of the population does not consume it due to religious concerns.”
According to Dr. Johnny van der Merwe, general director of AMT, an agricultural market trends analysis business, while poultry prices are rising higher this year than in 2021, demand for chicken meat continues to climb.
“At this time of year, we also begin to see more parties, celebrations, and weddings, [followed by] the festive season, which will increase demand for chicken and pork even more, resulting in higher costs.”
“As prices for other proteins such as beef and lamb rise, South Africans will consume more chicken.”
It is less expensive than other meats, which may sway middle-class customers toward this protein source, according to the survey. “Although pig may compete with chicken in terms of pricing, a considerable portion of the population does not consume it due to religious concerns.”
According to Dr. Johnny van der Merwe, general director of AMT, an agricultural market trends analysis business, while poultry prices are rising higher this year than in 2021, demand for chicken meat continues to climb.
“At this time of year, we also begin to see more parties, celebrations, and weddings, [followed by] the festive season, which will increase demand for chicken and pork even more, resulting in higher costs.”
