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Key market signals in the Broiler Industry 4Q 2017
1 | P a g e
Key Market Signals in the Broiler Industry
For the
fourth quarter of 2017
4Q 2017
Disclaimer: Information in this report reflects assumptions and also actual data. The projections
presented in the report are based upon specific production standards and indicate historic and
forecasted trends only.
Any and all information, data, know-how, documentation, materials and other communications,
written or oral, which are disclosed or provided to SAPA or its designees by a SAPA member shall be
regarded as confidential information belonging to that member and will not be disclosed to any other
member.
Key market signals in the Broiler Industry 4Q 2017
2 | P a g e Small footprint. Big impact.
Table of Contents
1. TOTAL POULTRY IMPORTS (INCLUDING TURKEY, DUCKS, GEESE) 4
1.1 MONTHLY: TOTAL POULTRY IMPORTS 4
1.2 QUARTERLY: TOTAL POULTRY IMPORTS 5
1.3 ANNUAL: TOTAL POULTRY IMPORTS (2017) 7
2. BROILER MEAT PRODUCTION AND TRADE 10
2.1 BROILER MEAT PRODUCTION 10
2.1.1 Broiler breeders 10
2.1.2 Broiler chick placements 11
2.1.3 Broiler production for slaughter (bird numbers) 11
2.1.4 Broiler and breeder meat production (tonnes) 12
2.2 BROILER MEAT IMPORTS 14
2.2.1 Monthly: total broiler imports 14
2.2.2 Quarterly: total broiler imports 14
2.2.3 Annual: total broiler imports 14
2.2.4 Frozen broiler imports 14
2.3 BROILER MEAT EXPORTS 17
2.3.1 Quarter 17
2.3.2 Annual: 2017 17
3. PRICE TRENDS 19
3.1 PRODUCER PRICES 19
3.1.1 Producer prices in real terms
3.1.2 Broiler prices in comparison with pork, beef and eggs 20
3.1.3 In comparison with pork, beef and egg during the 4Q 2017 24
3.1.4 SA prices in comparison with the USA 25
3.2 RETAIL PRICES 27
3.2.1 Whole freshchickens 28
3.2.2 Fresh chicken portions 29
3.2.3 Frozen chicken portions 29
3.3 FEED PRICES 31
3.3.1 Broiler feed price indicator 31
3.3.2 Broiler breeder feed price indicator 32
3.3.3 Feed price index vs broiler price 32
4. ECONOMIC OVERVIEW 34
4.1 ECONOMIC DATA 34
4.2 IN THE NEWS 38
Key market signals in the Broiler Industry 4Q 2017
3 | P a g e Small footprint. Big impact.
List of Figures
Figure 1: Poultry imports from the European Union as a percentage of total poultry
imports
Figure 2: Country of origin of poultry imports into South Africa for 4th quarter of 2017
Figure 3: Country of imports for 4th quarter, showing the EU countries as a single entity
Figure 4: Quarterly imports of broiler meat originating from Brazil, according to tariff
codes
Figure 5: Origin of total broiler imports in 2017, with EU countries grouped together
Figure 6: Percentage contribution of member countries to total EU poultry imports: 2017
Figure 7: Annual frozen broiler meat imports from the European Union, Brazil and others
Figure 8: Imports of frozen bone-in portions from the EU (presented as a single entity) in
comparison with the rest of the countries combined
Figure 9: Annual frozen broiler meat imports from EU countries: 2015, 2016 and 2017
Figure 10: Total annual poultry exports out of South Africa (tonnes)
Figure 11: Quarterly weighted average producer price for total sales realisation
Figure 12: Average annual weighted producer price for total sales realisation
Figure 13: Quarterly broiler meat product mix: 4Q 2017
Figure 14: Broiler producer price in nominal and real terms: annual averages
Figure 15: Broiler producer price in nominal and real terms: monthly values
Figure 16: Broiler producer price index vs food inflation index (bases 2008 and 2012)
Figure 17: Annual producer prices of protein sources: 2015, 2016 and 2017
Figure 18: Monthly producer prices of protein sources
Figure 19: USA leg quarter and deboned skinless breast prices (cents per pound; USDA)
Figure 20: USA broiler prices in comparison with the local IQF and whole bird producer
price (NSV)
Figure 21: Retail price of chicken meat: annual averages (source: Statistics SA)
Figure 22: Retail and producer price of fresh chicken (source: Statistics SA)
Figure 23: Retail and producer price of frozen chicken portions to Dec 2016 and 2 kg IQF
bags from January 2017 (R/kg; source Statistics SA)
Figure 24: Broiler feed price indicator, monthly from January 2012 to December 2017
(source: SAPA)
Figure 25: Broiler breeder feed price indicator, monthly from January 2012 to December
2017 (source: SAPA)
Figure 26: Year-on-year percentage change in broiler feed price and producer price to
December 2017 (source: SAPA)
List of Tables
Table 1a: Distribution of imports according to tariff (chicken)
Table 1a: Distribution of imports according to tariff (turkey, geese, ducks, guinea fowl)
Table 2: Broiler industry bird numbers
Key market signals in the Broiler Industry 4Q 2017
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1. TOTAL POULTRY IMPORTS (INCLUDING TURKEY, DUCKS, GEESE)
1.1 MONTHLY: TOTAL POULTRY IMPORTS
In 2017, poultry imports increased steadily from the sudden dip experienced in December 2016
(when a raft of AI-related trade bans against EU nations came into force). March 2017 imports
rocketed to record highs of 65 658 t as the US sought to fill its 2016/2017 quota. Since then,
imports have run between forty and fifty thousand tonnes per month. In December 2017, 48 600
tonnes of poultry meat were imported; 2 725 t more than in the previous month (+ 5.9 %).
Poultry imports were valued at R602.7 million (FOB); up R39.3 m on November 2017 levels (+
7.0 %). During December 2017, poultry imports consisted of 93.3 % chicken meat and product,
6.7 % turkey meat and product; and only 0.001 % ducks, geese and guinea fowl.
With the Netherlands banned from the South African poultry market, Brazil has been the main
country of origin for poultry imports since December 2016, with the exception of March 2017,
when the US shipped 25 103 t of product to South Africa (38.2 % of total imports that month).
In December 2017, Brazil imports totalled 28 979 t (59.6 % of total). The US was in second
place with 9 393 t of poultry imports to South Africa (19.3 % of total). Argentina was responsible
for 8.3 % (4 011 t) of the total imports in December; Denmark 4.7 % (2 297 t); Ireland 4.3 % (2
111 t) and Canada 2.1 % (1 039 t). Other countries contributed 1.6 % collectively.
Figure 1: Poultry imports from the European Union as a percentage of total poultry imports
0%
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Tonnes Poultry imports from EU vs total poultry imports
Poultry imports from EU, % Poultry imports from EU, t Total poultry imports, t
Key market signals in the Broiler Industry 4Q 2017
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Only 215 kilogrammes of poultry product arrived from France in December 2017, because of AI-
related restrictions on trade. The Germans have also been excluded from the market: 52 tonnes
of German poultry products arrived in November, but none in December 2017.
Poland entered the South African market in August 2016 and Polish volumes had increased to
2 521 t by November last year. The country has since experienced on-going outbreaks of HPAI
and no poultry imports were received from Poland right through 2017. Hungary has also not
exported to South Africa in 2017. Spain and Belgium have not exported poultry products to
South Africa in 4Q 2017.
Figure 1, above, shows the percentage of total imports originating from the European Union.
Imports from the EU contributed 9.1 % (4 408 t) of total poultry imports into South Africa in
December 2017 (cf 63.1 % in November 2016). EU tonnages were up 16.5 % (+ 623 t) on a
monthly basis. Imports are down 63.8 % (- 7 759 t) on December 2016 EU imports because of
AI-related trade bans.
1.2 QUARTERLY: TOTAL POULTRY IMPORTS
During 4Q 2017, 140 822 tonnes of poultry meat were imported at an FOB value of R1.72
billion. The distribution of imports according to tariff codes is listed below in Tables 1(a) and (b).
Table 1a: Distribution of imports according to tariff (chicken)
Tariff code Imports: 4Q 2017 (kg) % of total
Mechanically deboned meat 0207.1210 45 285 178 32.2
Carcasses 0207.1220 2 517 297 1.8
Whole frozen fowls 0207.1290 906 624 0.6
Fresh chicken cuts/offal 0207.1300 309 <0.01
Frozen (boneless portions) 0207.141* 4 981 255 3.5
Fowls offal 0207.142* 11 871 349 8.4
Poultry (bone-in portions) 0207.149* 66 296 643 47.1
Chicken: flavoured, herbed or marinated 1602.3290 291 323 0.2
Table 1b: Distribution of imports according to tariff (turkey, geese, ducks, guinea fowl)
Tariff code Imports: 4Q 2017 (kg) % of total
Whole frozen turkey 0207.2500 364 094 0.3
Frozen turkey portions and MRM 0207.2700 8 229 823 5.8
Frozen whole duck 0207.4200 51 874 0.04
Frozen duck cuts or offal 0207.4500 25 004 0.02
Goose: pâté de foie gras 1601.2010 1 041 <0.01
Prepared/preserved turkey 1602.3100 41 <0.01
Other poultry, prepared, not pastes 1602.3990 187 <0.01
During 4Q 2017, imports from Brazil made up 66.0 % of total poultry imports into South Africa
(Figure 2), compared to 71.8 % in 3Q 2017. The US and Argentina accounted for 14.8 % and
Key market signals in the Broiler Industry 4Q 2017
6 | P a g e Small footprint. Big impact.
7.6 % of total imports in the 4Q 2017, respectively. Ireland contributed 4.4 %; Denmark 4.3 %;
Canada 1.6 %; Chile 0.7 %; Thailand (0.4 %) and all other countries a total of 0.1 %.
Figure 2: Country of origin of poultry imports into South Africa for 4th quarter of 2017
Figure 3: Country of imports for 4th quarter, showing the EU countries as a single entity
Brazil 66.0%
United States 14.8%
Argentina 7.6%
Ireland 4.4%
Denmark 4.3%
Canada 1.6%
Chile 0.7%
Thailand 0.4% Other 0.1%
Country of origin of imports: 4Q 2017
Brazil 66.0%
United States 14.8%
EU 8.8%
Argentina 7.6%
Canada 1.6%
Chile 0.7% Other 0.4%
Country of origin for 4Q 2017: EU countries grouped
Key market signals in the Broiler Industry 4Q 2017
7 | P a g e Small footprint. Big impact.
If the European Union countries are considered as a single entity, the EU contribution to total
poultry imports was 8.8 % in the fourth quarter of 2017 (Figure 3, above), down from 8.6 % in
the 3Q 2017 and down from 52.4 % in 4Q 2016.
Of the total poultry imports from Brazil during 4Q 2017 (92 912 tonnes; Figure 4), 48.4 %
entered South Africa as mechanically deboned meat (0207.1210).
Figure 4: Quarterly imports of broiler meat originating from Brazil, according to tariff codes Frozen bone-in portions (0207.149*) made up 32.6 % of Brazilian imports (up from only 14.4 %
in 1Q 2017); 9.2 % was frozen chicken offal (0207.142*); 3.7 % frozen boneless portions; and
4.5 % frozen turkey portions and MDM (0207.2700). The remainder of Brazilian imports
comprised frozen chicken carcasses; whole frozen turkeys, and value-added chicken, in small
quantities; (Figure 4, above).
1.3 ANNUAL: TOTAL POULTRY IMPORTS (2017)
If it had not been for the effect of AI-related trade bans on December 2016 imports, 2016
imports would have been 20 % higher than in 2015. Poultry imports for the year 2017 totalled
556 877 t; which was a decrease of 3 278 t, or 0.6 %, in comparison with 2016 (560 155 t).
Poultry imports in 2017 are, however, up 25 % on the 5-year average (2012 – 2016). On an
FOB basis, the total value of imports for 2017 amounted to R6.44 billion, a 17.5 % increase
over 2016.
0207.1210 Chicken: Frozen MDM
48.4%
0207.1220 Chicken: Carcasses
1.1%
0207.141* Chicken: Boneless portions, frozen
3.7%
0207.142* Chicken: Offal, frozen 9.2%
0207.149* Chicken: Bone-in portions, frozen
32.6%
0207.2500 Turkey: Whole, frozen
0.2%
0207.2700 Turkey: Frozen MDM
4.5%
1602.3290 Chicken: Flavoured, frozen
0.3%
Poultry imports from Brazil for Q4 2017
Key market signals in the Broiler Industry 4Q 2017
8 | P a g e Small footprint. Big impact.
Brazil was the main country of origin in 2017, accounting for 60.6 %, or 337 476 t, of total
poultry imports into South Africa (+ 44.4 % on 2016). With AI affecting EU trade, the US was the
second largest importer into the country, with 15.6 % or 87 059 t (+ 218 % on 2016). Argentina
and Canada increased exports to South Africa, in the absence of many of the EU nations, to
account for 5.9 % (32 816 t) and 2.6 % (14 431 t) of 2017 imports, respectively. Of the EU
exporters, only Ireland, Belgium, Denmark and Spain exported significant quantities to South
Africa in 2017: 24 746 t (4.4 %), 23 451 t (4.2 %), 16 884 t (3.0 %) and 11 138 t (2.0 %),
respectively. Thailand exported 4 109 t to South Africa in 2017 (0.7 % of total imports).
All other importing countries contributed only 0.9 % to imports of poultry into South Africa in
2017 (Figure 5).
Figure 5: Origin of total poultry imports in 2017
If the EU countries are considered as a single entity, 14.0 % of poultry imports entered SA
through the EU in 2017, compared to 48.1 % in 2016 and 47.1 % in 2015. This drop in 2017
reflects the impact of the trade bans on EU countries affected by avian influenza (Figure 6).
The 269 260 tonnes imported from the EU in 2016 was a 19.9 % increase over the tonnes
imported from the EU in 2015 (+ 39 688 t). Had normal levels been imported from the EU in
December 2016, volumes would have been over 27 % higher that year than in 2015. In 2017,
77 935 tonnes of poultry imports arrived from the EU; down 71.1 % (- 191 325 t) on 2016 levels.
Brazil 60.6%
United States 15.6%
Argentina 5.9%
Ireland 4.4%
Belgium 4.2%
Denmark 3.0%
Canada 2.6%
Spain 2.0%
Thailand 0.7%
Other 0.9%
Country of origin for poultry imports (2017)
Key market signals in the Broiler Industry 4Q 2017
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Figure 6: Percentage contribution of member countries to total EU poultry imports: 2017
Belgium 30.1%
Denmark 21.7%
Germany 0.2%
Ireland 31.8%
Other < 0.3 %
Spain 14.3%
United Kingdom 1.8%
Poultry imports from EU for 2017
Key market signals in the Broiler Industry 4Q 2017
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2. BROILER MEAT PRODUCTION AND TRADE
We have received data from a number of breeders, hatcheries and producers for which
estimates were being used. This data has been back-dated, and output figures have
thus been revised. SAPA is indebted to these role players whose contributions have
made a substantial difference to the accuracy of the broiler statistics presented in this
report. We are also most grateful to our regular contributors.
The model has taken into account the loss of breeders due to highly pathogenic avian
influenza (HPAI)
2.1 BROILER MEAT PRODUCTION 2.1.1 Broiler breeders
Day-old parent pullets placed
An average of 180 700 day-old parent pullets was placed per week in December 2017.
This was a decrease of 3 800 parent pullets per week (- 2.1 %) compared to the
previous month but an increase of 32 500 parent pullets per week (+ 21.9 %) compared
to the same month in the previous year.
On a quarterly basis, an average of 178 800 day-old parent pullets was placed per week
during the fourth quarter of 2017 (4Q 2017). This was an increase of 12 500 per week (+
7.5 %) compared to 3Q 2017 and an increase of 12 000 per week (+ 7.2 %) compared
to 4Q 2016.
The total number placed for 4Q 2017 was 2 322 750; a 7.6 % increase compared to 3Q
2017 and a 7.3 % increase compared to 4Q 2016.
A forecast total of 8.829 million day-old parent pullets were placed in 2017; 473 800 (-
5.1 %) less than 2016 (9.302 million).
Broiler breeder flock
The average number of breeder hens for December 2017 was 6 027 400.
The average size of the breeder flock during 4Q 2017 was 6 034 800 birds. This was a
decrease of 4.2 % compared to 3Q 2017 and a decrease of 15.3 % compared to 4Q
2016.
The average flock size for 2017 was 6 491 million; 604 700 (- 8.5 %) less breeder hens
than in 2016 (7 096 million).
Key market signals in the Broiler Industry 4Q 2017
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2.1.2 Broiler chick placements
Actual placement:
Broiler hatcheries produced 20.478 million day-old chicks per week in December 2017.
Compared to November 2017, this was an increase of 2.2 million chicks per week (+
11.8 %). Compared to December 2016, this was an increase of 2.4 million chicks (+ 13.2
%).
During 4Q 2017 broiler hatcheries produced 240.5 million day-old chicks. This was a
decrease of 6.4 % compared to 3Q 2017 and a decrease of 16.4 % compared to 4Q
2016. The average weekly placement of day-old chicks for 4Q 2017 was 18.3 million; a
6.4 % decrease compared to 3Q 2017 and a 16.4 % decrease compared to 4Q 2016.
In total, 1 044.9 million broiler chicks were hatched during 2017; 91.74 million (- 8.1 %)
less than 2016 (1 136.6 million).
Industry potential:
Based on the forecasting model, potential production of 18.30 million broiler chicks per
week was projected for 4Q 2017. The actual production was 11.9 % more than the
potential.
Potential production of 240.49 million broiler chicks was projected for 4Q 2017, based
on the number of day-old parent females placed. The actual production was 3.6 % more
than the potential. The model is currently underestimating production – it is not known
what strategy broiler producers used to manage the situation created by the HPAI
outbreaks.
2.1.3 Broiler production for slaughter (bird numbers)
Actual production:
On average, 17.39 million broilers were produced per week in December 2017. This was
573 300 birds (- 3.2 %) less than the previous month and 82 300 birds (- 0.5 %) less
than the same month of the previous year.
The total production for 4Q 2017 was 237.8 million. This was 0.96 % more than 3Q 2017
but 0.98 % less than 4Q 2016.
The average production of broilers per week for 4Q 2017 was 18.09 million. This was a
0.97 % increase compared to 3Q 2017 but a 0.99 % decrease compared to 4Q 2016.
A total of 927.1 million broilers were produced for slaughter in 2017; 8.4 million (- 0.9 %)
less than in 2016 (935.6 million).
Key market signals in the Broiler Industry 4Q 2017
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Industry potential:
Potentially 17.29 million broilers could have been produced per week in 4Q 2017. Actual
production per week was 0.6 % more.
Based on the forecasting model, 230.8 million broilers were slaughtered during 4Q
2017. Actual production for the quarter was 3.0 % more than potential.
2.1.4 Broiler and breeder meat production (tonnes)
Actual production:
Broiler meat produced in December 2017 was 143 427 tonnes. This was 52 tonnes (+
0.04 %) more than November 2017 but 687 tonnes (- 0.5 %) less than December 2016.
Total broiler meat produced for 4Q 2017 was 442 697 tonnes. This was 0.96 % more
than the previous quarter but 3.0 % less than the same quarter of the previous year.
A total of 1.726 million tonnes of broiler meat was produced in 2017; 101 458 t (- 5.6 %)
tonnes less than in 2016 (1.828 million t).
Industry potential:
The forecasting model predicted the production of 142 534 broiler tonnes for December
2017. Actual production was 0.63 % more than potential. The prediction of broiler
tonnes for 4Q 2017 was 429 700 t, 3.0 % less than actual.
A further prediction by the forecasting model was 2 546 tonnes from the culling of
breeder hens and cocks in December 2017. The 4Q 2017 prediction was 7 467 breeder
tonnes.
Based on the breeder tonnes predicted, and actual broiler production, a combined
output of 139 400 tonnes resulted from the broiler industry for December 2017. The
total for 4Q 2017 was 450 165 tonnes. All breeder sales are assumed to be live, whilst
a broiler slaughter weight of 1.8 kg, revised from 1.85 kg in July 2015, was used. Total
broiler production includes all saleable offal.
The combined predicted total of broiler and breeder meat production was 1.760 million
tonnes in 2017; 102 689 tonnes (- 5.5 %) less than in 2016 (1 863 million).
Key market signals in the Broiler Industry 4Q 2017
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Table 2. Broiler industry bird numbers
BROILER INDUSTRY : KEY RESULTS - December 2017
Hatch Calendar Breeder
days Days hens
December 2017 17 31 767,885 180,679 6,027,429 87,032,354 20,478,201 77,029,598 17,393,780
November 2017 17 30 784,047 184,482 6,077,555 77,852,531 18,318,243 77,001,646 17,967,051
Change -16,163 -3,803 -50,126 9,179,823 2,159,958 27,952 -573,270
% Change -2.06% -2.06% -0.82% 11.79% 11.79% 0.04% -3.19%
December 2017 17 31 767,885 180,679 6,027,429 87,032,354 20,478,201 77,029,598 17,393,780
December 2016 18 31 666,988 148,220 7,136,764 81,435,318 18,096,737 77,398,351 17,477,047
Change 100,897 32,459 -1,109,335 5,597,036 2,381,464 -368,753 -83,267
% Change 15.13% 21.90% -15.54% 6.87% 13.16% -0.48% -0.48%
Jan>Dec 2016 209 366 9,302,492 178,244 7,095,720 991,136,544 18,971,727 935,572,025 17,891,883
Jan>Dec 2015 209 365 9,849,436 188,448 6,999,563 1,014,292,266 19,443,892 964,994,269 18,501,438
Change -546,944 -10,204 96,157 -23,155,722 -472,165 -29,422,244 -609,555
% Change -5.55% -5.41% 1.37% -2.28% -2.43% -3.05% -3.29%
Jan>Dec 2017 208 365 8,828,675 169,941 6,491,043 988,681,466 19,026,965 927,147,249 17,775,458
Jan>Dec 2016 209 366 9,302,492 178,244 7,095,720 991,136,544 18,971,727 935,572,025 17,891,883
Change -473,817 -8,303 -604,676 -2,455,078 55,238 -8,424,776 -116,425
% Change -5.09% -4.66% -8.52% -0.25% 0.29% -0.90% -0.65%
NOTE:
Month or Period: Refers to a calendar month or period
Week: Refers to an average 7 day week of which all 7 days fall within the specified month or period
/Week/Period/Week/PeriodAverage/Week/Period/Period/PeriodYTD forecast
(based on actual chicks)
Broilers Slaughtered
placed
Actual Broiler Chicks
pullets placed
Day-old Parent
/Week/Month/Week/MonthAverage/Week/Month/Month/MonthMonth on Month
/Week/Month/Week/MonthAverage/Week/Month/Month/MonthYear on Year
/Week/Year/Week/YearAverage/Week/Year/Year/YearFull year forecast
Key market signals in the Broiler Industry 4Q 2017
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2.2 BROILER MEAT IMPORTS
2.2.1 Monthly: total broiler imports
Of the 48 600 t of total poultry products imported into South Africa in December 2017,
broiler meat imports accounted for 45 336 t (93.3 %; + 2 059 t; + 4.8 % on a monthly
basis). The FOB value of broiler meat imports (R535.4 million) represents 88.8 % of the
FOB value for total poultry imports in December 2017 (R R602.7 million). Broiler imports
during December 2017 comprised 27.1 % mechanically deboned meat (tariff code
0207.1210); 58.0 % bone-in portions (0207.1491 - 1499) and 8.7 % frozen offal
(0207.1421 - 1429). The remainder was carcasses, boneless portions, whole frozen
chickens and value-added products.
2.2.2 Quarterly: total broiler imports
Of the 140 822 t of total poultry products imported into South Africa in 4Q 2017, broiler
meat imports accounted for 132 150 t (93.8 %; - 1 517 t; - 1.1 % on a quarterly basis).
The FOB value of broiler meat imports in the 4Q 2017 (R1.54 billion) represents 89.5 %
of the FOB value for total poultry imports during this quarter (R1.72 billion).
2.2.3 Annual: total broiler imports
Broiler imports for 2016 were 15.6 % higher than in 2015, despite new outbreaks of
avian influenza in some European exporting countries late in the year. According to the
audited figures of SARS (verified), the annual broiler imports for 2017 totalled 524 259
tonnes. This figure represents 94.1 % of the total poultry products imported (556 877 t).
Broiler imports for 2017 were 0.8 % lower than in 2016. The broiler imports for 2017 had
an FOB value of R5.92 billion (+18 % over 2016). Despite the slight annual decrease in
broiler imports, 2017 levels are still 25 % higher than the 5-year average (2012 – 2016).
2.2.4 Frozen broiler imports
Of the total broiler meat imported through 2017, 99.84 % was declared as frozen (523
428 t). Frozen broiler meat imports decreased by 0.9 % in 2017 compared to levels
imported during 2016 (528 108 t). Frozen broiler imports totalled 131 858 t in 4Q 2017;
down 1.2 % on 3Q 2017 levels.
The Brazilian contribution to total annual frozen broiler imports decreased from 77 % in
2009 to 41.9 % in 2014. In contrast, the proportion of frozen meat imports from the EU
increased dramatically over a five year period, reaching 51 % of total frozen imports by
December 2014, from 2.2 % in 2009. Trading restrictions on countries affected by avian
influenza reduced EU imports through 2015 and the EU proportion of total frozen broiler
imports averaged 42.6 %. In 2016, 49.7 % of frozen broiler imports came from the EU,
41.3 % from Brazil and 4.7 % from the US. In 2017, only 14.6 % of frozen broiler imports
into South Africa came from the EU, because of AI-related trade bans in place against
the Netherlands, the UK, France, Germany, Hungary, Poland, Spain and Belgium at
Key market signals in the Broiler Industry 4Q 2017
15 | P a g e Small footprint. Big impact.
intervals during the year. Brazil’s share of the frozen broiler market increased to 61.3 %
and the US to 15.7 %.
In tonnage terms, a total of 76 422 t of frozen broiler meat was imported from the EU in
2017, compared to 262 352 t in 2016 as a whole, 194 685 t in 2015 and only 4 139 t in
2009. Frozen broiler imports from the EU totalled 12 259 t in the 4Q 2017. During the
4Q 2017, EU imports accounted for 9.3 % of total frozen broiler imports (131 858 t) into
South Africa; compared to 57.9 % in 1Q 2014 (before the 2014/2015 avian influenza
bans on several EU countries) and 9.0 % in 3Q 2017.
Imports of Brazilian frozen broiler products totalled 218 036 t in 2016 but increased to
320 885 t in 2017 (+ 47.1 % over 2016). In 4Q 2017, Brazil has exported 88 255 t of
frozen broiler products to South Africa (66.9 % of total).
The US exported 82 314 tonnes of frozen broiler meat to South Africa in 2017, with a
volume of 19 380 t in the 4Q 2017 (14.7 %). The annual tonnages of frozen broiler
imports for the EU bloc, Brazil and other nations since 2011 are shown in Figure 7.
Figure 7: Annual frozen broiler meat imports from the European Union, Brazil and others
Figure 8 shows the monthly contribution of the EU to frozen bone-in imports into South
Africa over time. The penetration of the EU into this market from 2010 to 2016 is clearly
demonstrated in these two figures, along with the effect of trade restrictions (resulting
from AI outbreaks) on EU penetration in 1H 2015 and from November 2016 to
December 2017.
79,545
126,050
148,057
188,079 194,685
262,352
76,422
187,881 191,179
169,293 154,304
225,850 218,036
320,885
57,569 52,807 37,565
25,899 36,419
47,720
126,120
0
65,000
130,000
195,000
260,000
325,000
2011 2012 2013 2014 2015 2016 2017
Tonnes Frozen broiler imports from the EU countries, Brazil and others
EU Brazil OtherSource: SARS
Key market signals in the Broiler Industry 4Q 2017
16 | P a g e Small footprint. Big impact.
Figure 8: Imports of frozen bone-in portions from the EU (presented as a single entity) in
comparison with the rest of the countries combined
The contribution of individual EU member countries in terms of frozen broiler imports is
shown in Figure 9 for 2015, 2016 and 2017.
Figure 9: Annual frozen broiler meat imports from EU countries: 2015, 2016 and 2017
Dec
-13
Feb
-14
Ap
r-1
4
Jun
-14
Au
g-1
4
Oct
-14
Dec
-14
Feb
-15
Ap
r-1
5
Jun
-15
Au
g-1
5
Oct
-15
Dec
-15
Feb
-16
Ap
r-1
6
Jun
-16
Au
g-1
6
Oct
-16
Dec
-16
Feb
-17
Ap
r-1
7
Jun
-17
Au
g-1
7
Oct
-17
Dec
-17
0
10,000
20,000
30,000
40,000
Tonnes
Imports of frozen bone-in portions from the EU and other countries
Total imports from the EU countries Total imports from countries excluding EU countries
35
,53
3
9,5
08
23
,08
2
48
1 10
,04
3
13
,27
1
61
,99
5
25
,35
8
15
,41
5
24
,25
6
9,7
79
10
3 5,3
31
12
,57
0
15
,34
2
11
0,3
38
4,7
73
37
,56
4
42
,29
4
23
42
3
16
85
5
48
27
24
09
4
11
2
72
10
52
0
12
72
0
20,000
40,000
60,000
80,000
100,000
120,000
Be
lgiu
m
De
nm
ark
Fran
ce
Ger
man
y
Gre
ece
Hu
nga
ry
Ire
lan
d
Net
her
lan
ds
Po
lan
d
Spai
n UK
Tonnes
Frozen broiler meat imports from the EU
2015
2016
2017
Key market signals in the Broiler Industry 4Q 2017
17 | P a g e Small footprint. Big impact.
Of the total frozen broiler meat imported in 2017 (all nations; 523 428 t), 38.6 % was
mechanically deboned meat (201 795 t) and 44.5 % was bone-in broiler portions (233
046 t). Whole broilers contributed 1.8 %; carcasses 2.7 %; boneless portions 4.2 % and
offal 8.2 %.
In terms of product mix from the EU, the main product imported in 2017 was bone-in
portions, accounting for 74.7 % of the total EU frozen broiler imports. Mechanically
deboned meat accounted for only 2.4 % of frozen broiler imports from the EU; with 1.4 %
carcasses, 8.0 % whole frozen birds and 13.4 % offal. In tonnage terms, the EU
exported 155 924 t of bone-in portions to South Africa in 2015; 194 399 t in 2016 and 57
092 t in the 2017. The EU exported 5 355 t of frozen MDM in 2015; 21 333 t in 2016 and
1 800 t in 2017.
In 2016, Brazilian imports of frozen broiler meat included 78 % mechanically deboned
meat and 8.6 % bone-in portions. In 2017, Brazilian imports included 61.2 %
mechanically deboned meat and 24.3 % bone in portions.
In tonnage terms, Brazil exported 166 122 t of MDM to South Africa in 2015; 170 045 t in
2016 and 196 329 t in 2017. Brazil exported 26 591 t of frozen bone-in portions to South
Africa in 2015; 18 799 t in 2016 and 78 049 t in 2017.
In 2017, US imports of frozen broiler meat comprised 94.7 % bone-in portions,
compared to 88.9 % in 2016. In tonnage terms, the US exported 22 018 t of bone-in
portions to South Africa in 2016; and 77 971 t in 2017.
2.3 BROILER MEAT EXPORTS 2.3.1 Quarter
A total of 17 679 tonnes of poultry products were exported at an FOB value of R387.3
million during the 4Q 2017. Broiler exports represented 94.8 % of total poultry exports in
the 4Q 2017 (16 752 t), and 92.3 % of the rand value (FOB) of total poultry exports
(R357.5 million). Broiler exports increased 18.5 % compared to third quarter levels, but
decreased 6.4 % compared to exports of broiler meat during the fourth quarter of 2016.
The main destination countries for broiler exports were Lesotho at 6 247 t, Mozambique at
4 848 t, Namibia at 3 425 t, Botswana at 965 t, Swaziland at 400 t, Democratic Republic
of the Congo at 191 t, Zimbabwe at 179 t, Angola at 179 t and Zambia at 135 t of the 16
752 total tonnes exported.
2.3.2 Annual: 2017
A total of 74 021 tonnes of poultry products (Figure 10) were exported at an FOB value of
R 1.36 billion during 2016. In 2017, 62 842 tonnes of poultry products were exported at an
FOB value of R 1.345 billion. This was a decrease of 15.1 % on 2016 tonnages.
Key market signals in the Broiler Industry 4Q 2017
18 | P a g e Small footprint. Big impact.
Figure 10: Total annual poultry exports out of South Africa (tonnes)
Broiler exports accounted for 94.3 % of total poultry exports in 2017 (59 240 t), and 92.4
% of the rand value (FOB) of total poultry exports (FOB R1.24 m). The main destination
countries for broiler exports were Lesotho at 18 839 t, Mozambique at 16 782 t, Namibia
at 12 860 t, Botswana at 3 194 t, Zimbabwe at 1 623 t, Swaziland at 1 509 t, Zambia at 1
016 t and the Democratic Republic of the Congo at 840 t, of the 59 240 total tonnes
exported.
In 2017, 22.5 % of broiler exports were frozen bone-in portions, 20.3 % frozen
mechanically deboned meat, 13.5 % whole frozen chicken, 26.6 % fresh chicken cuts and
offal and 9.1 % frozen chicken offal (liver, feet and other). The remainder comprised a mix
of boneless chicken portions, whole fresh chickens, frozen chicken carcasses and offal,
value-added chicken and chicken pastes.
11,512
8,140
25,350
66,355
72,444 74,021
62,842
0
10000
20000
30000
40000
50000
60000
70000
80000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2011 2012 2013 2014 2015 2016 2017
Tonnes Total quantity of annual poultry exports
Chicken
Turkey
Duck, Geese and Guinea Fowl
Ducks, Geese or Guinea Fowl (Pre 2012)
Key market signals in the Broiler Industry 4Q 2017
19 | P a g e Small footprint. Big impact.
3 PRICE TRENDS 3.1 PRODUCER PRICES
Figure 11: Quarterly weighted average producer price for total sales realisation
Figure 12: Average annual weighted producer price for total sales realisation
13
.79
13
.08
13
.65
15
.39
14
.48
1
5.2
2
15
.62
16
.53
16
.54
1
7.1
1
16
.55
18
.20
17
.98
18
.88
18
.04
18
.80
18
.13
1
8.5
8
18
.28
19
.61
20
.86
21
.58
21
.30
22
.04
10.00
12.00
14.00
16.00
18.00
20.00
22.00
24.00
Q1
, 20
12
Q2
, 20
12
Q3
, 20
12
Q4
, 20
12
Q1
, 20
13
Q2
, 20
13
Q3
, 20
13
Q4
, 20
13
Q1
, 20
14
Q2
, 20
14
Q3
, 20
14
Q4
, 20
14
Q1
, 20
15
Q2
, 20
15
Q3
, 20
15
Q4
, 20
15
Q1
, 20
16
Q2
, 20
16
Q3
, 20
16
Q4
, 20
16
Q1
, 20
17
Q2
, 20
17
Q3
, 20
17
Q4
, 20
17
R per kg Quarterly weighted average producer price
for total broiler sales realisation
13.98
15.46
17.10
18.43 18.65
21.44
12.00
13.00
14.00
15.00
16.00
17.00
18.00
19.00
20.00
21.00
22.00
2012 2013 2014 2015 2016 2017
R per kg Annual producer price
for total broiler sales realisation
Key market signals in the Broiler Industry 4Q 2017
20 | P a g e Small footprint. Big impact.
Quarterly and annual producer prices for total realisation of broiler meat are given in Figures 11
and 12 above, respectively.
The average total realisation price for the fourth quarter (4Q 2017) was R22.04 per kg, an
increase of 3.5 % in comparison with the previous quarter (R21.30) and an increase of 12.4 %
in comparison with the fourth quarter in 2016. The following figure (Figure 13) depicts the
quarterly (4Q 2017) product mix in terms of volume of broiler meat produced.
Figure 13: Quarterly broiler meat product mix: 4Q 2017
3.1.1 Producer prices in real terms
The weighted average producer price for broilers (less all discounts, rebates, advertising
spent, secondary distribution, VAT, etc.) is adjusted for CPI (meat) in Figure 14 to
estimate the annual producer price in real terms. The CPI adjustment takes 2008 as the
base year (index = 100; base price = R13.55).
In real terms, with 2008 chosen as the base year and producer inflation (CPI meat)
corrected for, the average broiler producer price increased by 1.65 % in 2017 compared
to 2016. In real terms, the broiler price from 2010 to 2017 has remained below the 2008
average producer price of R13.55 per kg.
In real terms, the average broiler producer price for 2017 (R11.71) was 3.0 % less than
the 2015 average (R12.07) but 1.6 % higher than the 2016 average (R11.52).
IQF 56.7%
Frozen value-added 2.9%
Frozen cuts 6.8%
Fresh cuts 6.6%
Frozen chicken chunks and soup pack 8.3%
Fresh chicken chunks and soup pack 0.1%
Frozen sundries 14.3%
Whole frozen 1.9% Whole fresh 2.4%
Broiler product mix according to volume, 4Q 2017
Key market signals in the Broiler Industry 4Q 2017
21 | P a g e Small footprint. Big impact.
In December 2017, the broiler price in real terms was R11.73, compared to R12.14 in
December 2016; a year-on-year decrease of 3.4 %.
Figure 14: Broiler producer price in nominal and real terms: annual averages.
The monthly figures for broiler producer prices (nominal and real) are given in Figure 15.
The broiler producer price index presented in Figure 16 is compared to the SA food and
non-alcoholic beverages (NAB) price index. The indices are compared using two base
years on the same graph; base 2008 = 100 and base 2012=100.
Using 2008 as the base year, the broiler price index has remained below the food
inflation index from 2009 to April 2017 (Figure 16). From early 2013, the difference
between the two indices gradually decreased. By December 2014, there were only 8
points between the two indices. What this means is that broiler producer price inflation
was running above the food and NAB inflation rate in this period (thus closing the gap
between the two indices). So, when we use 2012 as the base year, it can be seen that
the broiler producer price index is greater than the food price index for two and a half
years from February 2013 to May 2015; not accelerating away from the general food
index, but at least above and parallel with it.
13.63 13.98
15.46
17.10
18.43 18.65
21.44
11.51 10.94
11.69 11.91 12.07 11.52 11.71
8.00
12.00
16.00
20.00
2011 2012 2013 2014 2015 2016 2017
R per kg
Producer price for broilers: nominal vs real terms (base 2008 = 100)
Producer price for broilers (weighted, average NSV)
Producer price for broilers in real terms (CPI (meat) adjusted)
2008 average producer price
Key market signals in the Broiler Industry 4Q 2017
22 | P a g e Small footprint. Big impact.
Figure 15: Broiler producer price in nominal and real terms: monthly value
Figure 16: Broiler producer price index vs food inflation index (bases 2008 and 2012).
7.50
10.00
12.50
15.00
17.50
20.00
22.50
25.00
Jan
-11
May
-11
Sep
-11
Jan
-12
May
-12
Sep
-12
Jan
-13
May
-13
Sep
-13
Jan
-14
May
-14
Sep
-14
Jan
-15
May
-15
Sep
-15
Jan
-16
May
-16
Sep
-16
Jan
-17
May
-17
Sep
-17
R per kg
The broiler producer price (NSV): nominal terms vs real terms (Base: 2008 = 100; R13.55 per kg)
Producer price for broilers (weighted average, NSV)
Producer price for broilers in real terms (CPI (meat) adjusted)
2008 base price (R13.55; base = 100)
20
40
60
80
100
120
140
160
80
100
120
140
160
180
200
220
240
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Ind
exes: 20
12
Ind
exes
: 20
08
Broiler price inflation vs food price inflation
Base 2008: food
Base 2012: food
Base 2012: broiler price
Base 2008: broiler price
Key market signals in the Broiler Industry 4Q 2017
23 | P a g e Small footprint. Big impact.
From May 2015 to July 2016 (with the exception of a short-lived recovery in the last
quarter of 2015), the broiler producer price index began to decline noticeably relative to
the food price index. Using 2008 as the base year, the broiler price index can be seen
dropping down, away from the food price index. With 2012 as the base year, the food
index continues to steadily climb, while the broiler price index drops below it for the first
time in several years. This is a measure of the strain producers found themselves under
in terms of producer price, at a time when other food items were increasing in price and
the price of raw materials was escalating.
From July 2016, the broiler price index has increased at a faster rate than the food price
index, as prices have had to rise to compensate for animal feed costs. If 2008 is the
base year, the broiler price index still lies below the food price index at the end of 2016,
but is approaching it sharply. With 2012 as the base year, the broiler price index leapt
back up above the food price index in November 2016 and has remained there since.
In 2015, the quarterly difference between the two indices (producer price and food and
NAB inflation; base = 2008) was always less than 18 points. In 2016, it did not dip
below 26 points in any one quarter and peaked at 33.5 in 3Q 2016. In 2017, the
difference was recorded at 22.4, 18.7, 21.3, and 17.5 in 1Q, 2Q, 3Q and 4Q,
respectively. In December 2017, the difference was 14.6 index points; the lowest value
since November 2015. A smaller gap is in the producers’ favour.
3.1.2 Broiler prices in comparison with pork, beef and eggs
Broiler meat and eggs remain the most affordable of all protein sources described in the
graph below (Figure 17).
Beef prices, for classes A2/A3, are considerably higher than pork and broiler prices. The
average beef producer price at the abattoir (carcass price, excluding the fifth quarter) for
2016 was R37.79 per kg and for 2017 was R45.41. In December 2017, beef classes
A2/A3 fetched R47.80 per kg; a year-on-year increase of 23.1 % (cf December 2016;
Figure 18).
The average producer price of class C2/C3 beef was R31.11 per kg in 2016 and R39.26
in 2017. In December 2017, class C2/C3 beef fetched R43.59 per kg (Figure 18); a
year-on-year increase of 25.8 % (Source: Stats SA).
The average pork price (all classes) was R24.26 per kg in 2016 and R27.57 in 2017.
During December 2017, the pork producer price was R30.44 per kg. The December
producer price has increased by 11.7 % in comparison with the same month in the
previous year.
The average egg producer price for 2016 was R18.29 per kg and for 2017 was R21.40.
Please note that the mean egg weight used to calculate egg prices per kilogramme has
been increased in SAPA models to 58.3 g for 2015, 58.5 g for 2016 and 58.4 g for 2017,
so average egg producer prices from 2014 have changed since the 3Q 2015 report. In
Key market signals in the Broiler Industry 4Q 2017
24 | P a g e Small footprint. Big impact.
December 2017, the egg producer price was R25.88 per kg (R18.05/dozen); an
increase of 31.6 % on a yearly basis.
The average producer price for broilers (total realisation) for 2016 was R18.92 per kg
and for 2017 was R21.44 per kg (+ 15.0 %). In December 2017, the broiler producer
price was R22.52 per kg; an increase of 10.3 % on a yearly basis.
Figure 17: Annual producer prices of protein sources: 2015, 2016 and 2017.
3.1.3 In comparison with pork, beef and egg during the 4Q 2017:
In the 4th quarter of 2017, the beef price for classes A2/A3 was considerably higher than
pork and broiler prices. The average beef producer price at the abattoir (carcass price
excluding the fifth quarter) for 4Q 2017 was R46.49 per kg; a 0.14 % increase on a
quarterly basis and a 23.6 % increase on a year-on-year basis. The average producer
price of class C2/C3 beef was R41.74 per kg for 4Q 2017; a 1.9 % increase on a
quarterly basis and a 23.9 % increase on a year-on-year basis (source: SA Stats;
SAPA).
The average price of pork (all classes) was R29.66 per kg in 4Q 2017; a quarterly
increase of 9.7 %, and a year-on-year increase of 13.6 %. The average egg producer
price for 4Q 2017 was R24.97 per kg; a quarterly increase of 16.6 %, and an increase of
34.9 % on a year-on-year basis (SAPA; average all sizes).
34
.17
27
.27
22
.83
18
.43
16
.65
37
.79
31
.11
24
.36
18
.65
18
.29
45
.41
39
.26
27
.57
21
.44
21
.40
10.00
18.00
26.00
34.00
42.00
50.00
Beef (Abattoirclass A2/A3)
Beef (Abattoirclass C2/3)
Pork (all classes) Broiler producerprice (NSV)
Egg producer price(all sizes)
Producer price (R/kg)
Producer prices for protein sources: annual averages
2015
2016
2017 YTD
Key market signals in the Broiler Industry 4Q 2017
25 | P a g e Small footprint. Big impact.
The average producer price for broilers (total realisation) for 4Q 2017 was R22.04 per
kg; a quarterly increase of 3.5 %, and an increase of 12.4 % on a year-on-year basis
(SAPA).
Figure 18: Monthly producer prices of protein sources
3.1.4 SA prices in comparison with the USA
The price of US leg quarters in c/pound is contrasted with the US price for deboned and
skinless breast meat cuts in Figure 19. A severe drop in the price of US leg quarters was
experienced through 2015, because of export bans imposed in reaction to AI outbreaks in
the US. Some recovery in leg quarter prices is evident through 2016 and, especially in 1H
2017 (peaking in July), as export volumes improved. Prices retreated in 2H 2017, ending
the year 10.4 % above December 2016 prices for leg quarters. December 2017 prices are
up 37.5 % over those realised two years ago in December 2015 when the effects of the
HPAI outbreak were at their most severe. However, the December 2017 price is still 28 %
below the price realised in December 2014 (just before the US avian influenza outbreak).
10
15
20
25
30
35
40
45
50
Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17
Price (R/kg) Beef, pork, poultry and egg producer prices
Beef (Abattoir class A2/A3) Beef (Abattoir Class C2/C3)
Pork (average all classes) Egg (average all sizes)
Broiler producer price (NSV)Source: AMT,SAPA
Key market signals in the Broiler Industry 4Q 2017
26 | P a g e Small footprint. Big impact.
Figure 19: USA leg quarter and deboned skinless breast prices (cents per pound; source USDA).
Figure 20: USA broiler prices in comparison with the local IQF and whole bird producer price (NSV)
0
25
50
75
100
125
150
175
200
Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17
Price (c/lb) USDA prices of chicken meat
Leg quarters Breasts, deboned and skinless
0.00
10.00
20.00
30.00
40.00
50.00
Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017
Rand per kg
US broiler price (in SA rand/kg) compared to SA producer price for IQF
US: skinless/boneless breast US: bone-in breast US: whole broilers
US: leg quarters SA: IQF mixed portions SA: whole frozen bird
Key market signals in the Broiler Industry 4Q 2017
27 | P a g e Small footprint. Big impact.
The USA broiler prices for region North East are presented in SA rand per kg in the graph
above (Figure 20) and compared to the South African price for total realisation (IQF) and
whole frozen birds.
The disparity between US prices for skinless, boneless breast meat and leg quarters, in
the same market, is clearly evident.
3.2 RETAIL PRICES
The source of the broiler producer prices for the different portions presented in this
section is SAPA (see definition at the end of this document).
Retail poultry prices are collected and disseminated by Statistics SA. From January 2013
onwards, Statistics South Africa removed whole frozen chicken from their reporting
basket. The retail price of fresh whole chicken, fresh chicken portions and frozen
chicken portions were tracked by Stats SA until December 2016.
In January 2016, Stats SA changed their methodology for reporting chicken prices. This
change, which was not shared with users, resulted in what appeared to be substantial,
unrealistic changes to the retail price of frozen chicken portions in relation to 2015 data.
The figures for January to March 2016 were R38.85, R40.21 and R45.06/kg, compared
to R28.50, R28.22 and R28.55 under the old methodology - and not grounded in reality.
The issue was raised with Stats SA and 2016 figures under the old methodology were
secured and used in all 2016 SAPA reports. Unfortunately, the higher figures from the
new methodology were released to the public, National Agricultural Marketing Council
(NAMC), etc. in early 2016 and were subsequently included in further calculations (e.g.
% inflation of meat products by NAMC) and then disseminated in the media. The huge
increases gave the impression (to a readership which might also not make the distinction
between retail prices and producer revenues) that chicken prices were soaring. Retail
prices clearly did not increase by almost 50 % from one month to the next and producer
prices were, in fact, dropping at the time.
From the beginning of 2017, Stats SA continued with their changes to the way in which
they present frozen chicken prices. Historically, Stats SA arrived at a per kilogramme
price for frozen chicken portions by taking all the prices available to them on all
packaging sizes (2 kg bags, 1.5 kg bags, individually-priced packs, etc.) and then
averaging these prices. From January, Stats SA split their reporting on frozen chicken
portions into 8 codes: six for IQF portions (bag sizes: 1 kg, 1.5 kg, 1.8 kg, 2 kg, 4 kg, 5
kg); one for the remainder of the frozen portions (excluding IQF; for portions where the
R/kg price is given on the packet); and one for frozen portions where the “real price per
kilogramme” has to be calculated from pack weight and price. Removing the popular
and economical IQF bags from the last two codes has obviously had the effect of
pushing up the average price of these “remainder” categories. NAMC are currently
reporting on 2 kg IQF packs, along with an additional table in which the 1 kg IQF packs
Key market signals in the Broiler Industry 4Q 2017
28 | P a g e Small footprint. Big impact.
and the “real price/kg” packs are reported. Until January 2018, we will be unable to
compute and report year-on-year increases in frozen chicken portions because Stats SA
have not overlapped their data collection periods.
Figure 21: Retail price of chicken meat (R/kg): annual averages (Source: Stats SA)
From January 2017, for the purposes of this report, frozen chicken prices will be given in
terms of 2 kg IQF bags, and an average of the two “remainder” categories – that is,
frozen portions excluding all IQF bags.
The annual retail price of broiler chicken meat from 2013 to 2017 (source: Stats SA) is
shown in Figure 21. Note that the historical calculation of the price of frozen chicken
portions falls away at the end of 2016 and is replaced with two new measures: 2 kg IQF
bags and frozen chicken portions (excluding IQF; average of both Stats SA calculations).
3.2.1 Whole Fresh Chickens
Whole chickens (fresh): The average retail price for 2016 was R41.83 per kg and for
2017 was R44.25 per kg (+ 5.8 %). The retail price of whole frozen chickens in 4Q 2017
was R44.94 (compared to R43.95 in 3Q 2017; + 2.3 %). A lack of monthly data from
broiler producers has affected estimates of the producer price of whole fresh chicken
through 2015, 2016 and 2017, making calculation of the retail mark-up unreliable.
34
.49
44
.84
24
.96
37
.71
48
.03
27
.21
39
.56
51
.21
28
.98
41
.83
53
.71
28
.75
44
.25
56
.70
31
.53
45
.31
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
55.00
60.00
Whole chicken:fresh
Chicken portions:fresh
Chicken portions:frozen
Retail: 2 kg IQFportions
Frozen portions,excluding IQF
R per kg Retail price of broiler meat
2013
2014
2015
2016
2017
Not in Stats SA basket until 2017
Not in Stats SA basket until 2017
Key market signals in the Broiler Industry 4Q 2017
29 | P a g e Small footprint. Big impact.
3.2.2 Fresh Chicken Portions
Chicken portions (fresh): The average retail price for 2016 was R53.71 per kg and
R56.70 per kg in 2017 (+ 5.6 %). The average producer price through 2016 was R29.99
per kg and in 2017 was R31.38 (+ 4.6 %). The mark-up from producer to retailer through
2016 was + 79.1 % and in 2017 was 80.7 %.
The retail prices of fresh chicken portions from December 2012 to December 2017 are
presented in Figure 22; along with producer prices (SAPA).
The average retail price for 4Q 2017 was R57.84 (3Q 2017: R56.69 per kg); an increase
of 2.0 % on a quarterly basis. The average producer price for 4Q 2017 was R31.40 (3Q
2017: R30.92 per kg). The average mark-up in the 4Q 2017 was 84.2 % for fresh
chicken portions.
Figure 22: Retail and producer price of fresh chicken portions (source: Statistics SA).
3.2.3 Frozen chicken portions
The retail and producer price of frozen chicken portions on a monthly basis from
December 2012 are shown below (Figure 23).
Chicken portions (frozen): The average retail price for 2016, under the old methodology,
was R28.75 per kg. The producer price was R20.33 per kg. The mark-up from producer
to retailer was 41.4 %.
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
55.00
60.00
Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17
R per kg
Retail and producer price of fresh chicken portions
Retail: chicken portions fresh price Producer: chicken portions fresh price (braaipack)
Key market signals in the Broiler Industry 4Q 2017
30 | P a g e Small footprint. Big impact.
The average producer price for Individually Quick Frozen (IQF) mixed portions was
R17.00 per kg in 2016 and the mark-up was 69.1 %. In the product mix for 2016, frozen
chicken portions made up 5.5 % and IQF 60.1 %.
Figure 23: Retail and producer price of frozen chicken portions to Dec 2016 and 2 kg IQF
bags from January 2017 (R/kg; source Statistics SA)
Going into 2017, with the new Stats SA methodology: The average retail price for 2 kg
IQF bags in 4Q 2017 was R32.67/kg; an increase of 4.6 % on 3Q 2017 prices. A year-
on-year comparison with 4Q 2016 is not available from Stats SA. The producer price for
mixed IQF portions in 4Q 2017 was R23.09; an increase of 6.7 % over 3Q 2017
(R21.63). The mark-up from producer to retailer was 41.4 % in 4Q 2017. The average
retail price for 2 kg IQF bags in the 2017 was R31.53 per kg (Stats SA) and the average
producer price was R21.73 (mark-up: 45.1 %).
The average retail price for frozen chicken portions, excluding IQF bags, in 4Q 2017 was
R47.74/kg; an increase of 2.7 % on 3Q 2017 prices. As with the IQF portions, a year-on-
year comparison with 4Q 2016 is not available from Stats SA. The producer price for
frozen chicken portions for 4Q 2017 was R23.22; an increase of 3.4 % over 3Q 2017
(R22.39). The mark-up from producer to retailer was 106 %. The average retail price for
frozen chicken portions, excluding IQF bags, in 2017 was R45.31.
10.00
15.00
20.00
25.00
30.00
35.00
Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17
R per kg
Retail and producer price of frozen chicken portions
Retail: frozen chicken portions
Retail: 2 kg IQF portions
Producer: frozen chicken portions
Producer: IQF portions
Key market signals in the Broiler Industry 4Q 2017
31 | P a g e Small footprint. Big impact.
3.3 FEED PRICES
3.3.1 Broiler feed price indicator
The average feed price for 4Q 2017 was R4 778 per tonne, an increase of 1.6 % over the
average price in the 3Q 2017 (R4 705). The average broiler feed price in the fourth
quarter of 2017 was 16.0 % lower than in the 4Q 2016 (R5 688). In December 2017, the
feed price indicator was R4 852/tonne.
The graph below depicts the monthly broiler feed indicator from January 2012 to
December 2017 (Figure 24).
The average feed price for 2016 was R5 602 per tonne. This is 13.5 % more than the
average feed price for 2015 (R4 934). The average feed price indicator for 2017 was 10.5
% lower than in 2016, at R5 016/tonne.
The high feed prices experienced in the second half of 2015 and through 2016 were a
result of the severe drought experienced through the 2014/2015 and 2015/2016 maize
seasons. Prices moderated through 2017 because of a bumper maize crop in the
2016/2017 season.
Figure 24: Broiler feed price indicator, monthly from January 2012 to December 2017 (source: SAPA)
R 4,356 R 4,581
R 4,819 R 4,934
R 5,602
R 5,016
2,800
3,300
3,800
4,300
4,800
5,300
5,800
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
R per tonne
Broiler feed price indicator
Broiler feed price indicator Average annual feed price indicator
Key market signals in the Broiler Industry 4Q 2017
32 | P a g e Small footprint. Big impact.
3.3.2 Broiler breeder feed price indicator
The average breeder feed price indicator for 4Q 2017 was R4 533 per tonne, an increase
of 2.3 % in comparison with Q3 2017 (R4 430/t) but a decrease of 13.6 % in comparison
with the same quarter in the previous year (R5 244/t). The feed price indicator for
December 2017 was R4 520/t.
. The graph below depicts the monthly broiler breeder feed price indicator from January
2012 onwards, to December 2017 (Figure 25).
The average broiler breeder feed price for 2016 was R5 255 per tonne. This was an
increase of 22.6 % in comparison with 2015 (R 4 286). The average feed price indicator
for 2017 was R4 714 per tonne; 10.3 % less than in 2016.
Figure 25: Broiler breeder feed price indicator, monthly from January 2012 to December
2017 (source: SAPA)
3.3.3 Feed price index vs broiler price
Year-on-year percentage changes in the feed price index and the broiler producer price
are presented in Figure 26.
R 3,661
R 4,014 R 4,169 R 4,286
R 5,255
R 4,714
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
R per tonne Broiler breeder feed price indicator
Series1 Series2
Key market signals in the Broiler Industry 4Q 2017
33 | P a g e Small footprint. Big impact.
Through 2011 and 2012, to July 2013, feed prices escalated year-on-year, with
particularly high increases during most of 2012. The graph shows clearly that percentage
year-on-year increases in broiler producer prices during this period were not as high as
the year-on-year feed price increases, which impacted negatively on profit levels in the
industry. Only from January 2013 were producers able to maintain some level of year-on-
year increase in the broiler producer price, even when feed prices were rising (e.g. March
to August 2014).
From August 2014 to end July 2015, broiler producers enjoyed higher year-on-year
percentage increases in the producer price than the year-on-year changes in the feed
price. With the drought biting, the situation deteriorated again for broiler producers from
August 2015, with annual increases in feed prices outstripping annual increases in broiler
revenues. Year-on-year percentage increases in broiler producer price moved into
negative territory between March and July 2016 but returned to positive territory in August
2016 and have remained there to the end of 2017; exceeding feed price increases from
December 2016. Year-on-year increases in feed prices moved into negative territory from
February 2017, while year-on-year changes in producer prices have climbed steadily,
exceeding + 15 % for several months of the year.
Figure 26: Year-on-year percentage change in broiler feed price and producer price (source: SAPA)
-25.0
-15.0
-5.0
5.0
15.0
25.0
35.0
45.0
De
c-1
1
Mar
-12
Jun
-12
Sep
-12
De
c-1
2
Mar
-13
Jun
-13
Sep
-13
De
c-1
3
Mar
-14
Jun
-14
Sep
-14
De
c-1
4
Mar
-15
Jun
-15
Sep
-15
De
c-1
5
Mar
-16
Jun
-16
Sep
-16
De
c-1
6
Mar
-17
Jun
-17
Sep
-17
De
c-1
7
Percentage
Percentage change in broiler feed price and producer price on a yearly basis
% Change in broiler producer price
% Change in broiler feed price
Key market signals in the Broiler Industry 4Q 2017
34 | P a g e
4. ECONOMIC OVERVIEW
4.1 ECONOMIC DATA
South Africa ended 2017 in good spirits. The rand strengthened by over 11 % between the ANC’s December elective conference and the
middle of March 2018. A cabinet reshuffle saw the removal of several ministers implicated in “state capture” - and the replacement of
compromised appointees at the Treasury, SABC, SARS and Eskom with people of reputation and integrity has buoyed commentators. In
agricultural circles, “Ramaphoria” has been tempered by the Economic Freedom Front’s successful motion to have a parliamentary
committee review and amend Section 25 of the constitution, which deals with land expropriation without compensation. Moody’s decided
not to downgrade South Africa’s foreign currency rating to below investment level when their review was announced at the end of March;
and there is hope that the prime lending rate will decrease. Good rains are forecast over five provinces for the last weekend in March.
Historic SAFEX prices Global food price index
Month Year White maize Yellow maize Soyabean FAO
R/t R/t R/t http://www.fao.org/worldfoodsituation/foodpricesindex/en/
www.sagis.org.za Food Meat Cereal
Feb 2017 2,363 2,380 5,905 175.5 161.2 150.5
Mar 2017 1,974 2,061 5,191 171.6 165.2 147.8
Apr 2017 2,056 2,148 5,039 168.9 169.3 146.0
May 2017 1,918 2,032 4,868 172.9 172.7 148.0
Jun 2017 1,865 1,989 4,689 175.3 175.6 154.3
July 2017 1,955 2,066 4,933 179.0 174.9 162.2
Aug 2017 1,964 2,071 4,795 177.2 174.3 153.0
Sept 2017 1,970 2,070 4,875 178.6 174.0 151.9
Oct 2017 2,007 2,100 4,919 176.6 173.1 152.8
Nov 2017 2,114 2,198 5,176 175.7 172.8 153.1
Dec 2017 1,983 2,066 4,932 169.1 169.7 152.4
Jan 2018 2,042 2,065 4,720 169.0 168.9 156.8
Feb 2018 1,921 1,994 4,679 170.8 169.0 160.8
Key market signals in the Broiler Industry 4Q 2017
35 | P a g e Small footprint. Big impact.
Exchange rate Inflation Food inflation Repurchase rate Fuel price (Reef) SACCI
Month Year ZAR:USD % % % Petrol Diesel Business CI
all urban 95 0.05 (index)
xe.com Stats SA/SARB Stats SA MPC SARB Automobile Association
Feb 2017 13.19 6.3 9.9 13.62 11.63 95.5
Mar 2017 12.95 6.1 8.7 7.00 13.54 11.61 93.8
Apr 2017 13.44 5.3 6.7 13.30 11.51 94.9
May 2017 13.27 5.4 7.0 7.00 13.79 11.81 93.2
Jun 2017 12.90 5.1 6.9 13.54 11.58 94.9
July 2017 13.12 4.6 6.8 6.75 12.86 10.98 95.3
Aug 2017 13.25 4.8 5.7 13.05 11.27 89.6
Sept 2017 13.14 5.1 5.5 6.75 13.72 11.71 93.0
Oct 2017 13.68 4.8 5.3 14.01 12.13 92.9
Nov 2017 14.11 4.6 5.2 6.75 14.05 12.36 95.1
Dec 2017 13.13 4.7 4.8 14.76 12.96 96.4
Jan 2018 12.21 4.4 4.5 6.75 14.42 12.74 99.7
Feb 2018 11.25 4.0 3.9 14.12 12.57 98.9
2016 14.71 6.4 13.8
High 141: Jan 2006
2017 13.31 5.3 6.3 2018 forecast 4.9 2019 forecast 5.4
Unemployment rate, % GDP growth (Stats SA)
Narrow Expanded %
Stats SA RSA Agriculture Mining Manufacturing Financials Construction Retail
1Q 2017 27.7 36.4 -0.5 26.2 12.8 -4.1 -1.2 -1.3 -5.9
2Q 2017 27.7 36.6 2.9 36.8 3.9 2.9 2.5 -0.5 0.6
3Q 2017 27.7 36.8 2.3 41.1 6.3 3.7 1.2 -1.1 -0.1
4Q 2017 26.7 36.3 3.1 37.5 4.4 4.3 2.5 -1.4 4.8
Key market signals in the Broiler Industry 4Q 2017
36 | P a g e Small footprint. Big impact.
GDP growth
Cote d’Iv. Botswana Kenya Ethiopia Angola Nigeria Zambia Zimbabwe Namibia Brazil Argentina Russia EU CAǂ China
2015 8.9 -1.7 5.7 9.6 3.0 2.7 2.9 1.4 6.0 -3.5 2.6 -2.8 1.0 6.9
2016 8.3 4.3 5.8 7.5 0.0 -1.6 3.0 0.7 1.1 -3.5 -2.2 -0.2 1.7 6.7
2017 7.6 4.5 4.9 8.5 1.2 1.0 4.2 2.8 1.7 1.0 2.7 1.7 3.8 6.8
2018f 7.2 4.7 5.5 8.2 1.6 2.5 4.5 0.9 3.0 2.0 3.0 1.7 2.9 6.4
2019f 7.2 4.8 5.9 7.8 1.5 2.8 5.0 0.2 3.5 2.3 3.0 1.8 3.0 6.3
http://www.worldbank.org/en/publication/global-economic-prospects
ǂ Europe and central Asia
Annual GDP growth
Year Sub-Saharan Africa World RSA
y/y % y/y % y/y %
2015 3.1 2.8 1.3
2016 1.3 2.4 0.3
2017 estimate 2.4 3.0 0.8
2018 forecast 3.2 3.1 1.1
2019 forecast 3.5 3.0 1.7
http://www.worldbank.org/en/publication/global-economic-prospects
Brent crude oil FNB BER Merchantec Nielsen Consumer Confidence
$/barrel SA Consumer CI SA CEO confidence RSA Global
statista.com
1Q 2017 53.68 -5 51.4 77 101
2Q 2017 49.97 -9 38.7 78 104
3Q 2017 52.11 not published 38.9 83 105
4Q 2017 61.55 -8 38.4
2018 forecast: $62 Long-term avg: + 4 Neutral: 50
Key market signals in the Broiler Industry 4Q 2017
37 | P a g e Small footprint. Big impact.
Credit rating: South Africa (foreign currency)
2016 Apr 2017 Jun 2017 Nov 2017 Mar 2018
Moody's BAA2 BAA2 ↓BAA3 BAA 3 BAA 3
negative Under review Negative Under review Stable
Standard & Poor's BBB- ↓BB+ BB+ BB negative negative negative stable Fitch BBB- ↓BB+ BB+ BB+ negative stable stable stable
www.countryeconomy.com/ratings/south-africa
Investment grade
Below investment grade
Maize harvest estimate Crops Estimate Committee
Dam levels
Million t
Mar 2016 Mar 2017
2014/15 Final 9.942
Western Cape 27 19
2015/16 Final 7.778
North West 90 67
2016/17 Final 16.744
Gauteng 92 92
2017/18 First estimate 12.222
Mpumalanga 78 77
Limpopo 78 66
KZN 58 60
Eskom annual increase %
Eastern Cape 64 67
2016/17 9.40
Free State 87 73
2017/18 2.20
Northern Cape 98 76
2018/2019 5.23
dwa.gov.za/hydrology/weekly/sumprovince.aspx
The data in the tables above is available in an associated Excel spreadsheet.
Key market signals in the Broiler Industry 4Q 2017
38 | P a g e
4.2 IN THE NEWS The links in this section are available in an associated Word document, with hyperlinks enabled, making the internet pages easy to access.
Avian influenza
Highly pathogenic avian influenza, HPAI H5N8, was confirmed in broiler breeders near Villiers in
late June 2017. A second outbreak in laying hens was then reported from Standerton. Since then,
a total of 84 outbreaks have occurred in farmed birds in Gauteng, Mpumalanga, the Western Cape,
KwaZulu-Natal, North West, the Free State and the Eastern Cape (to 13 March 2018). There have
been three cases in backyard flocks in 2018 – in Theewaterskloof (Western Cape); near
Groblersdal, Limpopo; and, most recently, in De Kroon, near Brits (North West).
In addition, State veterinarians have reported 81 “outbreaks” in wild birds and hobbyist birds in a
second report to the OIE (24 July 2017; updated 13 March), which covers all cases listed to 21
February 2018. A total of 585 deaths were recorded in these birds. Yet to be reported to the OIE is
a February outbreak of H5N8 avian influenza amongst African penguins at Boulders Beach
(Simons Town; Western Cape). Scientists have been banned from handling seabirds in South
African coastal colonies until 1 June. Poultry farmers are urged to be watchful as winter approaches
and temperatures drop.
http://businesslive.co.za/bd/national/2018-03-26-poultry-farmers-urged-to-watch-out-for-avian-
flu
https://www.nature.com/articles/d41586-018-03951-6
As per South Africa’s latest report to the World Organisation for Animal Health (OIE) on 13 March
2018, the outbreaks in the table below have been confirmed in domestic poultry (commercial
operations, ostriches and backyard flocks). In local media, the total birds reported dead or culled to
early November was 4.76 million. However, state veterinarians had only reported 3 091 522 culled
and 666 180 dead to the OIE by 13 March 2018.
Date Prov District Enterprise Birds Culled Died
1 19 Jun MP Dipsaleng Farm Breeders 178 976 8211
2 20 Jun MP Dipsaleng Farm Layers 62 080 180 920
3 6 Jul GT Ekurhuleni Farm Layers 385 293 39
4 9 Jul MP Govan Mbeki Farm Layers 4 969 2 535
5 21 Jul MP Dipsaleng Farm 85 50
6 24 Jul MP Dipsaleng Farm 413 87
7 1 Aug MP Lekwa Farm 300 000 32 000
8 2 Aug WC Oudtshoorn Farm
9 4 Aug GT Ekurhuleni Farm 29 965 1 774
10 4 Aug GT Mogale City Farm 77 000 236
11 6 Aug MP S Tshwete Farm 394 435 2 325
12 9 Aug WC Hessequa Farm Ostriches
13 9 Aug WC Hessequa Farm Ostriches
Key market signals in the Broiler Industry 4Q 2017
39 | P a g e Small footprint. Big impact.
Date Prov District Enterprise Birds Culled Died
14 11 Aug MP Backyard Ducks/geese 166 227
15 15 Aug WC Saldanha Bay Backyard Geese/hens 42
16 15 Aug WC Hessequa Farm Ostriches 1 013
17 17 Aug KZN Abaqulisi Farm Layers 257 12
18 18 Aug WC Hessequa Farm Ostriches
19 18 Aug WC Cape Town Farm Ducks 25
20 21 Aug WC Hessequa Farm Ostriches
21 21 Aug WC Cape Town Farm Layers 49 616
22 21 Aug WC Beau. West Farm Ostriches
23 21 Aug WC Hessequa Farm Ostriches
24 23 Aug WC Cape Town Farm Layers 150 000 10 000
25 23 Aug WC Hessequa Farm Ostriches
26 24 Aug WC Cape Town Farm Ducks 5 533
27 24 Aug WC Kannaland Farm Ostriches 5
28 25 Aug WC Hessequa Farm Ostriches
29 28 Aug WC Hessequa Farm Ostriches
30 30 Aug WC Drakenstein Backyard 1 11
31 30 Aug MP Lekwa Backyard 89 94
32 1 Sep NW Maq. Hills Farm 43 732 4 857
33 4 Sep WC Swartland Farm 82 324 10 000
34 5 Sep WC Hessequa Farm
35 6 Sep WC Cape Town Farm 300 000 60 000
36 6 Sep WC Theewaterskloof Backyard 2 11
37 8 Sep WC Stellenbosch Farm 200 000
38 8 Sep WC Drakenstein Farm 400 000 20 000
39 8 Sep WC Oudtshoorn Farm
40 11 Sep WC Kannaland Farm Ostriches
41 11 Sep WC Kannaland Farm Ostriches
42 12 Sep WC Kannaland Farm Ostriches
43 12 Sep EC N M Bay Farm 5 860 3 813
44 13 Sep WC Kannaland Farm Ostriches
45 13 Sep WC Oudtshoorn Farm Ostriches
46 15 Sep WC Oudtshoorn Farm Ostriches
47 15 Sep WC Kannaland Farm Ostriches
48 16 Sep WC Stellenbosch Farm 100 000 9 000
49 17 Sep WC Swartland Farm 25 000 500
50 17 Sep WC Swartland Farm 60
51 18 Sep WC Drakenstein Farm 50 000 500
52 19 Sep WC Kannaland Farm Ostriches
53 19 Sep WC Oudtshoorn Farm Ostriches
54 22 Sep WC Cape Town Farm 32 961 39
55 22 Sep FS Matjhabeng Farm 35
56 23 Sep FS Matjhabeng Farm 12 000 2 000
57 26 Sep WC Mossel Bay Farm Ostriches
58 26 Sep WC Oudtshoorn Farm Ostriches
Key market signals in the Broiler Industry 4Q 2017
40 | P a g e Small footprint. Big impact.
Date Prov District Enterprise Birds Culled Died
59 27 Sep WC Oudtshoorn Farm Ostriches
60 27 Sep WC Hessequa Farm Ostriches
61 1 Oct WC Theewaterskloof Farm 19 412 452
62 2 Oct WC Drakenstein Farm 20 000
63 9 Oct WC Drakenstein Farm 218 602 200
64 11 Oct WC Hessequa Farm Ostriches
65 11 Oct WC Oudtshoorn Farm Ostriches
66 16 Oct WC Oudtshoorn Farm Ostriches
67 18 Oct WC Drakenstein Farm 1 973 200
68 20 Oct WC Oudtshoorn Farm Ostriches
69 25 Oct WC Swellendam Farm Ostriches
70 26 Oct WC Oudtshoorn Farm Ostriches
71 31 Oct WC Oudtshoorn Farm Ostriches
72 7 Nov WC Hessequa Farm Ostriches
73 13 Nov WC Hessequa Farm Ostriches
74 17 Nov WC Swartland Farm Ostriches
75 22 Nov EC Dr Beyers Naude Farm Ostriches
76 23 Nov WC Hessequa Farm Ostriches
77 28 Nov WC Oudtshoorn Farm Ostriches
78 4 Dec WC Witzenberg Farm Ostriches
79 3 Jan WC Kannaland Farm Ostriches
80 15 Jan WC Hessequa Farm Ostriches
81 16 Jan WC Swellendam Farm Ostriches
82 16 Jan WC Witzenberg Farm Ostriches
83 29 Jan WC Theewaterskloof Backyard
84 11 Feb LP Elias Motsoeledi Backyard
At the farm level, producers are urged to keep poultry away from wild birds (use of housing/netting,
etc.); to reduce any factors which might attract wild birds on to a site; to control and reduce
movement of people and equipment into and between poultry houses and sites; to
maintain/upgrade sanitation of housing/personnel/equipment; to avoid introducing birds of unknown
health status into existing flocks; to report any illness/death of birds to State Veterinary services;
and to dispose of manure/dead birds appropriately.
In 2017, most of the ten European nations licensed to export poultry products to South Africa
suffered outbreaks of highly pathogenic avian influenza. Outbreaks in Belgium, France, Germany,
Hungary, Poland, Denmark and Spain were reported resolved to the OIE by the end of the year.
The UK has reported 18 outbreaks, totalling 82 cases, in wild birds since 1 January 2018. In their
16 March 2018 report, outbreaks were detailed from Warwickshire, Dorset, Hertfordshire,
Berkshire, Oxfordshire, Lincolnshire, Wakefield, Rutland, Surrey, Hampshire, South Glamorgan,
Suffolk, Greater London and Devon. The affected species included gulls, grebes, ducks, geese,
swans, moorhens, buzzards, pheasants and goshawks.
Key market signals in the Broiler Industry 4Q 2017
41 | P a g e Small footprint. Big impact.
The Germans reported H5N6 HPAI in a backyard flock in Schleswig-Holstein on 20 March 2018;
and in wild birds around Bayern from January 1.
From 9 December 2017, a new event has been opened with the OIE by the Dutch. Mute swans in
the Gelderland region were found to be infected with an H5N6 subtype of the AI virus. This is
thought to be a re-assortment linked to H5N8, and not related to the Asian H5N6 strain. In a follow-
up report submitted on 27 February 2018, further cases in swans, mallard ducks, gulls, greylag
geese and Indian peafowl have been reported from Gelderland, Flevoland, Zuid-Holland and
Noord-Holland. Cases since December now total 66 cases in 8 outbreaks, with 30 deaths amongst
the affected birds. The latest reported case in wild birds was on 20 February 2018. Dutch poultry
farmers have been told to keep birds inside. In December 2017, the Dutch reported an outbreak of
HPAI on a duck farm to the east of Amsterdam. This outbreak resulted in the culling of 16 000
fattening ducks. On 24 February, another outbreak of H5N6 HPAI was recorded at a farm in the
province of Groningen in the north of the country. Almost 38 000 birds have been culled, after 230
died from the disease. The update to this report covers a second outbreak on a commercial farm in
Overijssel (100 birds died; almost 29 000 culled).
In 2018 YTD, there have been reported cases of highly pathogenic avian influenza (H5N8) in
Afghanistan, Bulgaria, Hong Kong, India, Iraq, Israel and Pakistan. New outbreaks of H5N6 have
been reported from China, Chinese Taipei, Denmark (white-tailed eagle), Ireland (white-tailed
eagle), Japan, Sweden and Vietnam. In addition India has reported the H5N1 strain. The US is
vigilant after low pathogenic H7N1 was found in a turkey flock in Jasper County, Missouri as part of
routine screening for avian influenza.
Land expropriation without compensation The matter has been referred to the Constitutional Review Committee which must report to
Parliament by 30 August 2018. Some interesting articles on the subject can be accessed at:
http://www.politicsweb.co.za/documents/accelerating-fundamental-change-the-motlanthe-repo
https://www.huffingtonpost.co.za/2018/03/24/the-cyril-and-roelf-show-set-for-second-act-at-
major-land-summit_a_23394176/
https://www.news24.com/Columnists/GuestColumn/land-expropriation-without-compensation-
what-does-it-mean-20180304-5
https://city-press.news24.com/Voices/amending-the-constitution-for-land-an-exciting-opportunity-
and-a-real-danger-20180322
https://www.huffingtonpost.co.za/2018/02/28/south-africa-needs-a-law-that-says-what-is-
equitable-access-to-land_a_23373448/
https://www.dailymaverick.co.za/article/2018-03-26-its-complicated-the-land-issue-according-to-
the-anc-nasrec-conference/#.WrnlO_VuLDd
Key market signals in the Broiler Industry 4Q 2017
42 | P a g e Small footprint. Big impact.
https://www.dailymaverick.co.za/article/2018-04-04-op-ed-to-solve-the-real-land-problem-we-
might-have-to-change-the-constitution-but-not-the-property-clause/#.WsSAVPVuKbx
Listeriosis outbreak As of March 2018, there have been 978 reported cases of listeriosis and 189 deaths. On December
22, a Sovereign Foods poultry abattoir at Hartebeesport was closed by the Department of Health as
a precautionary measure. The plant was allowed to reopen on 9 January, with no evidence to
suggest it was the primary source of the disease outbreak. On March 4, the Enterprise Foods
factory at Polokwane in Limpopo was identified as the primary source of the listeriosis outbreak
(strain ST6). A Rainbow Chicken (RCL Foods) factory at Wolwerhoek, Sasolburg was also named
by Health Minister Aaron Motsoaledi as contaminated – but by a different strain of listeria. The
announcement triggered a massive recall of ready-to-eat polony products, sausages and cold
meats. Class action lawsuits against Tiger Brands, which owns Enterprise Foods, have been
lodged. The Department of Health is insisting that imports of mechanically deboned meat (“white
slime”) are tested for Listeria monocytogenes on entry.
http://bhekisisa.org/article/2018-01-26-00-listeria-follow-sas-medical-sleuths-as-they-chase-a-killer-in-a-race-against-time-1
https://www.timeslive.co.za/news/south-africa/2018-01-09-sovereign-foods-abattoir-back-in-operation-after-listeriosis-scare/
https://www.timeslive.co.za/news/south-africa/2018-03-04-breaking-enterprise-polony-identified-as-source-of-listeria-outbreak/
https://www.fin24.com/Companies/Retail/listeriosis-class-action-suit-against-tiger-brands-enterprise-launched-in-johannesburg-court-20180329 http://www.destinyman.com/2018/03/29/listeriosis-containment-not-mean-consumers-let-guard-govt/
African Continental Free Trade Agreement:
South Africa is one of forty four countries to sign a declaration on establishing a free trade region in
Africa. The Kigali Declaration was signed on 21 March at the 10th Extraordinary Summit of the
Assembly of the African Unity in Rwanda. Nigeria’s decision not to sign the declaration may prove
to be a stumbling block. In total, nine nations declined to sign the declaration.
https://www.fin24.com/Economy/sa-signs-african-free-trade-agreement-20180321
http://www.africanews.com/2018/03/23/nigeria-s-buhari-explains-failure-to-sign-continental-free-
trade-agreement/
https://www.premiumtimesng.com/foreign/africa/262823-why-we-did-not-sign-africa-free-trade-
agreement-zambia.html
Key market signals in the Broiler Industry 4Q 2017
43 | P a g e Small footprint. Big impact.
https://www.dailymaverick.co.za/article/2018-03-20-africa-a-dream-of-a-continental-free-trade-
area-deferred/#.WrfpVPVuLDc
Internationally
Brazil’s meat and poultry processing giant, BRF, has put 3 000 workers on paid leave from May,
adding to 1 000 workers from another plant already kicking their heels at home. The lay-offs are a
result of last year’s “weak flesh” scandal. The Ministry of Agriculture has temporarily suspended
certification and exports to the EU during March, as investigations continue.
https://www.reuters.com/article/brf-meat-probe/brazils-brf-sends-around-3000-workers-on-30-
day-paid-leave-idUSL1N1R90IP
https://www.reuters.com/article/us-brf-europe/brazil-stops-brf-poultry-exports-to-eu-
idUSKCN1GS1PJ
Businesses are increasingly viewing animal welfare as a business risk that must be managed.
Managing this risk early will become increasingly important as alternative proteins are developed
and veganism becomes more popular. After leading the corporate charge to transition to cage-free
egg production, McDonalds US is now turning its attention to broiler welfare. In October 2017, it
announced revised welfare guidelines which will dictate how 70 % of its global demand for broiler
meat will be produced by suppliers. Although the company stopped short of moving away from fast-
growing breeds (as demanded by animal rights activists), it will be setting up a global advisory
council to drive its welfare process. World-renowned animal welfarist Temple Grandin is expected
to sit on this council. The new welfare code calls for controlled atmosphere stunning, environmental
enhancements such as perches and improved lighting regimes. Kraft-Heinz have also expanded
their welfare commitments to include higher standards for broiler chickens in their US supply chain.
https://www.reuters.com/article/us-mcdonalds-chicken-standards/mcdonalds-sets-new-welfare-standards-for-chickens-idUSKBN1CW2IL http://www.chicagotribune.com/business/ct-biz-mcdonalds-chicken-welfare-policy-20180315-story.html http://www.feedstuffs.com/news/mcdonald-s-launches-chicken-sustainability-advisory-council
http://news.kraftheinzcompany.com/press-release/corporate/kraft-heinz-expands-animal-welfare-commitments-include-higher-standards-well http://www.kraftheinzcompany.com/pdf/KHC_AnimalWelfarePolicy_10.27.17.pdf
Key market signals in the Broiler Industry 4Q 2017
44 | P a g e Small footprint. Big impact.
DEFINITION:
Net Sales Value (NSV):
- invoiced price - less volume discount. - less settlement discount. - less rebates (incl. advertising spent). - less any other discounts i.e. direct distribution etc. - less secondary distribution (i.e. from vector or cold chain to retail outlets e.g. Shoprite, PnP, etc.). - excluding VAT
- The NSV amount must be net income to the business.
Disclaimer: The views expressed in SAPA STATS reports reflect those of SAPA in collaboration with its independent consultants and do not constitute any specific advice as to decisions or actions that should be taken. While every care has been taken in preparing documents no representation nor warranty or any expressed or implied undertaking is given and no responsibility or liability is accepted by SAPA as to the accuracy or completeness of the information contained herein whether as electronic data or as a finished report. SAPA or its independent consultants do not accept responsibility or liability for any damages of whatsoever nature which any person may suffer as a result of any decision or action taken on the basis of the information contained herein. All opinions and estimates contained in the reports may be changed after publication without notice. All forecasts of future production, prices, trade or feed and feed ingredient trends are based on the opinion of independent consultants contracted to SAPA. These forecasts are for guideline purposes only and SAPA does not, in any way, warrant that these predictions will be realised. SAPA therefore cautions any user of this information to treat it in an appropriate manner. These statistical reports and/or electronic data are placed in the public domain and may be used by other parties conditional to the source of the data/ report being attributed to SAPA.
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