Agri Noord Kaap - Drought fuels meat prices, farmers fear the worst

Johannesburg – South Africa’s livestock farmers are preparing for more losses after the driest year on record already cut herds and as the hemisphere’s winter nears, fueling food prices that are already climbing at the fastest pace in 18 months.

Scarce grazing and drought-stricken farmers’ inability to buy animal feed may trigger a second livestock selloff during winter after similar conditions caused an oversupply during most of the summer months, Gerhard Schutte, the chief executive officer of South Africa’s Red Meat Producers Organisation, said by phone on Monday.

A supply shortage is likely to occur from September and would be exacerbated should good rainfall occur from that period as farmers retain animals to rebuild their herds, Schutte said.

“If the new season is a good rainy season, prices will start going crazy,” Lardus van Zyl, chairperson of the meat producers’ body, said by phone. “Not only will the abattoirs be looking for animals, but so will farmers who seek proper breeding stock.”

The warning on meat prices comes as South Africa last year had the least rainfall since records started in 1904. The drought more than doubled corn prices and drove food inflation to 8.8% in February, the highest since August 2014. Meat-price growth was more subdued at 5.5% in the same period due to the selloff in animals.

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