Relief for chicken lovers as poultry prices are set to ease in 2024: report

Poultry price increases is expected to ease, after double-digit hikes over the past two years, according to the Spring edition of the Absa AgriTrends report.

The report showed that a stronger rand and robust growth in poultry production by key global suppliers like Brazil, could see the average price of chicken products rise by just over 1% this year in some instances.

Dr Marlene Louw, Senior Economist, Absa AgriBusiness said: “In recent times, the outbreak of diseases like Avian Influenza has caused a global shortage of this protein source, which put upward pressure on prices.”

“While potential new disease outbreaks may change the price outlook going forward, all things being equal, we expect that lower feed prices will improve margins for producers, which could stimulate supply. This could in turn assist in keeping price increases contained over the medium term, which is good news for consumers.”

While chicken accounts for around two-thirds of meat consumed in the country, about 20% of local consumption is serviced through imports of which mostly are frozen bone-in portions.

Supply interruptions like the incident in July this year where Brazil experienced a case of New Castle disease resulting in trade being suspended for 21 days could have a significant impact on price movements.

Louw said: “With around 400,000 tons of chicken being exported out of Brazil each month, the event highlighted the importance of Brazil as a key exporter servicing the global market.”

“South Africa is especially vulnerable to export disruptions out of Brazil – in 2023, more than three-quarters of chicken imports to South Africa, came from the Southern American agricultural giant.”

Amidst call for chicken pieces to be zero-rated, Louw said that it is important to acknowledge food affordability however it is also crucial to note that a change in prices like that could have unintended consequences.

For example, relative price changes of products in the meat complex are likely to alter consumption patterns, which could have an impact on the prices and margins of other products in the meat complex.

Louw said that policies that support and enable efficient broiler production like effective and agile disease management as well as service delivery could limit price increases of chicken products.

“This would likely have a less distortive effect on relative prices and margins and contribute to providing consumers with price relief,” Louw said.

Source: Absa Agribusiness

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