South Africa’s livestock industry has faced numerous challenges over the past few years. One of these was the rise in feed prices since 2020, especially for maize and soybeans. The rise in animal feed prices coincided with a worsening in consumers’ financial strain due to the damaging effects of the pandemic. Thus, we saw a decline in the demand for red meat products as consumers opted for relatively cheaper forms of protein.
Moreover, the spread of foot-and-mouth disease (FMD) to six of South Africa’s nine provinces for the first time in history was another challenge for the industry. This brought temporary bans in certain export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022.
Despite the FMD-related export bans, South African beef producers sent sizable volumes of beef products to markets that did not close the import channel. This is evident in the beef exports for 2022, which amounted to 28 422 tonnes (albeit down 12% from 2021), according to data from Trade Map. This is only mildly below the ten-year average exports.
Fresh beef accounted for 54% of overall exports, while the balance was frozen beef. Within this total figure, a significant decline was recorded in frozen beef exports, which were at 12 945 tonnes in 2022, down 24% year-on-year. Meanwhile, fresh beef exports increased by 2% year-on-year to 15 477 tonnes.
The key markets for South Africa’s fresh beef were Kuwait (with a market share of 22%), Jordan (16%), Mozambique (13%), United Arab Emirates (12%), Qatar (9%), Netherlands (4%), Lesotho (3%), Canada (3%), Zimbabwe (3%), Mauritius (3%), and Eswatini (2%). These markets accounted for 90% of South Africa’s fresh beef exports in 2022.
In the case of frozen beef exports, the top export markets were Lesotho (16%), China (14%), Nigeria (14%), United Arab Emirates (9%), Mozambique (7%), Kuwait (6%), Egypt (5%), Qatar (4%), United Kingdom (3%), Netherlands (3%), and Jordan (2%). These markets accounted for 82% of South Africa’s frozen beef exports in 2022.
The outbreak of the foot-and-mouth disease also negatively impacted South Africa’s wool exports. China, which accounts for roughly 70% of South Africa’s wool exports in value terms, temporarily suspended South Africa’s wool exports in the second quarter of 2022 and only opened the market in the last week of August 2022.
The suspension happened despite a unique protocol to handle the wool shipments and avoid contamination during a foot-and-mouth disease outbreak in South Africa. South Africa and China agreed on this protocol following the 2019 outbreak, which weighed on exports.
This resulted in a 21% year-on-year decline in the export value of wool in 2022, to US$337 million, according to data from Trade Map. Still, this is significant, accounting for 3% of South Africa’s record agricultural export value of US$12,8 billion in 2022. Meanwhile, beef exports were about 1% of agricultural exports, valued at US$151 million in 2022.
Aside from the trade dynamics, the wool and beef industries are also among the agricultural subsectors with a large share of new-entrant black farmers that also experienced financial pressures over the past couple of years of higher input costs and animal disease outbreaks. The National Agricultural Marketing Council estimates suggest that black farmers account for 18%, 13% and 34% of wool, mohair, and cattle production, respectively.
The outbreaks we faced in the last few years will not be the last. Other industries that face the same challenge are poultry and piggery, which are susceptible to diseases such as African swine fever and avian influenza, which typically come as a heavy financial burden for producers. South Africa’s inability to control the spread of disease in the recent outbreaks signals a failure in the country’s veterinary services and related support services (laboratories and vaccine production).
Therefore, the government and organized agriculture bodies should work together to address the biosecurity challenges. The government should lead the way to keep up with the promise of the Agriculture and Agro-processing Master Plan, which seeks to boost collaboration amongst social partners to improve inclusive growth in agriculture.
Written for and first appeared in Business Day.
Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za
