The good news for the poultry industry is that the worst of the drought is over. The not-so-good news is that the full benefits may take another six months to materialise. The bad news is that in the longer term, local producers will still have to contend with high volumes of imports plus the bottom line effect of the recently announced ban on brining. Last week, three listed players — Sovereign Foods, Astral and Quantum — released results highlighting the precarious state of the industry. Margins and earnings were down significantly, with little recovery expected in the coming 12 months. The larger players with strong balance sheets will survive but smaller producers are expected to close or be acquired by larger ones. Sovereign’s ability to shake off a dogged attempt by unlisted Country Bird Holdings (CBH) to get control at 900c a share will depend on its success in developing value-added markets. But as one of the smaller listed poultry firms, it is hard to see Sovereign holding ...
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