The price of red meat is expected to go up significantly during the course of the next few months.
First National Bank analysts believe that the price rise of between 9 and 15% is due to tight supply and the expected increase in demand during the festive season.
FNB says that red meat slaughter is up this year due to the drought, but there has not been an oversupply as would be expected, and so no lowering in price.
“In terms of the outlook for beef, we are heading into a seasonal price increase of between R3.4 and R5.7 per kilogram (kg) for Class A beef as braai season returns,” says Paul Makube, Senior Agricultural Economist at FNB.
“Consumers that prefer to braai lamb can expect to pay between R5.6 and R9.4 per kg more for Class A lamb over the festive period.”
While pork is expected to gain from the price of red meat, poultry will not, due to an increase in imports.
If prices do not decrease by January, he warns, there will be more resistance from consumers.
Fortunately, the expected rainfall over the coming months will be standard, meaning that farmers can get back to business as usual without fear of drought or floods.
“By mid-2017, we should see a moderation in grain prices which will lower animal feed costs, resulting in improved margins and profitability levels for farmers that are currently facing losses from the recent drought,” concludes Makube.