JOHANNESBURG - South Africa's pork industry and its value chain could suffer losses of up to R1 billion as the price of the meat continues to decline in a fallout from the recent outbreak of listeriosis, an FNB economist said on Monday.
A variety of ready-to-eat processed meats, mainly made from pork, have been recalled from supermarket shelves after being identified as the source of the disease outbreak.
Paul Makube, a senior agricultural economist at FNB Agri-Business, said while the lower prices were concerning for the industry, they were a blessing for consumers feeling the pinch of rising food costs, who were likely to settle for pork as a cheaper alternative.
Makube said this trend would probably continue over the short term.
"The pork industry, unnecessarily suffered a severe blow following the recent outbreak of listeriosis, the loss to the value chain so far could exceed R1 billion," Makube said.
"Even though demand for processed and cold meats fell sharply due to the health and safety concerns from the listeriosis outbreak, pork farmers have now had to redirect the pigs for the fresh meat market thereby creating a surplus and in so doing have further increased pressure on low prices."
He said another positive for consumers was the decrease in the cost of maize, a large component of animal feed.
Maize constitutes over 75 percent of livestock feed, hence its supply and prices have a major influence on the total cost to customers.
This is particularly the case in poultry and pork as they are mainly produced under intensive feeding systems.
"South Africa now has a surplus in maize and the expected 2017/18 production is estimated at over 12.42 million tons," Makube said.
"Therefore, if maize prices remain flat they will have a major impact in sustaining the lower prices for consumers."