Listeria outbreak set to cost the pork industry at least R1bn
The pork industry’s loss after the listeria outbreak could exceed R1bn.
Consumers’ reaction to the outbreak has led to a drop in prices for pork products, while the prices of other meat products are on the rise‚ FNB Agri-Business senior agricultural economist Paul Makube said.
The National Institute for Communicable Diseases indicated in a report on Sunday that 199 people had died from the listeria outbreak, to date. The outbreak has led to a drop in demand for cold and processed meats.
Makube said in a statement that the pork industry had unnecessarily suffered a severe blow after the outbreak and added that the loss to the value chain so far could exceed R1bn.
“Pork farmers have now had to redirect the pigs for the fresh meat market, thereby creating a surplus‚” Makube said. “In so doing [they] have further increased pressure on low prices.”
Johann Kotzé‚ CEO of the South African Pork Producers’ Organisation‚ said earlier in April that the industry was losing R45m a week and that the price of a pig had dropped between 40% and 50%.
According to FNB, the drop in pork prices could be positive for one group of people: consumers looking to save money. Prices for other meats were up about 6%‚ according to FNB.
Additionally‚ FNB said a drop in the price of maize‚ a large component of livestock feed‚ would most likely keep pork prices low.
“SA now has a surplus in maize and the expected 2017-18 production is estimated at over 12.42-million tonnes‚” Makube said. “Therefore‚ if maize prices remain flat they will have a major impact in sustaining the lower prices for consumers.”
Kotzé said earlier in the month that the drop in demand for pork would hit small farmers particularly hard. Arnold Prinsloo‚ South African Meat Processors Association chairperson‚ commented earlier that the outbreak was costing the processed meat industry hundreds of millions of rand per month.