Broiler production in South Africa is expected to reach 957 million broilers or 1.29 million tons of meat in 2010, up three percent from a year ago. Since 2000, broiler production in South Africa grew by an average of 4 per cent annually, slowing over the last two years.
Two large producers produce 50 per cent of total broiler production in South Africa. A third company produces 8 per cent and four medium-sized producers supply 20 per cent of the market. The balance consists of about 44 smaller producers, producing less than 200,000 broilers per week. Some consolidation has taken place in recent years, with larger companies buying up some of the smaller producers. The result is an increased economy of scale and a reduced potential for price wars in the consumer market. Poultry producer prices increased an average of 8.2 per cent annually between 2000 and 2009.
Feed price increased 32 per cent in 2008 (from R2,648/ton to R3,502/ton) due to increases in the price of corn and soybeans. In 2009, feed prices fell to an average price of R3,326/ton, still higher than historical levels. South Africa’s corn crop for the marketing year May 2010 - April 2011 is estimated to be the second largest ever recorded and with a record soya bean crop for 2009/10, possibly leading to lower feed prices in 2010.
The Rand exchange rate primarily drives broiler meat imports into South Africa. When the Rand appreciates against the US dollar, imports of broiler meat increase as meat imports become cheaper. Broiler meat imports reached 205,827 tons in 2009, up 7.8 per cent due to a stronger Rand. If the strong Rand continues further broiler meat imports are expected to reach almost 225,000 tons in 2010, or 17 per cent of local production. Brazil has more than 74.6 per cent of the import market.
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