The poultry industry says it does not believe there will be chicken shortages in December because of the high stock levels of frozen meat, as well as the actions it has taken to mitigate the bird flu outbreak.
This assurance follows many headlines warning of impending chicken shortages as millions of birds were culled in response to SA’s worst bird flu outbreak ever recorded.
About 6-million laying hens that produce eggs for consumption were culled since the outbreak began in July. About 2.3-million broiler chickens that lay eggs for hatching were culled as part of the legislated mandatory response to tackle the airborne disease.
While consumers in Gauteng and the northern provinces have faced egg shortages, the SA Poultry Association (SAPA) said they anticipated minimal chicken shortages, with none expected from 2024. They also think the outbreak has reached its peak and will begin waning.
SAPA spokesman Izaak Breitenbach said chicken producers have already begun importing 83-million broiler hatching eggs to rebuild the poultry population, and the first batch arrived in October. These eggs will hatch to produce chickens destined for meat production.
In addition, due to lower sales in winter, the poultry industry has excess frozen chicken stock to sell. Astral, SA’s largest chicken producer, previously announced that it did not foresee shortages for its suppliers due to its extra chicken stock that it could release to retailers and fast-food outlets.
“Forecasted import volumes for the next three months look stable and increasing, which will also supplement local supply and help address any possible shortages,” Breitenbach said.
While consumers have experienced egg shortages and increased egg prices, SAPA said farms have imported more table eggs and the department of agriculture last month said it had granted 115 permits for the importation of fertilised eggs, 48 permits for imported egg powder (used as a substitute for eggs by food producers), 2,406 permits to import poultry meat, and 24 permits for table eggs. It said a single permit can cover a shipping container or 10,000 tonnes of goods.
This should begin to reduce the egg shortage and bring down the high prices.
Even as consumers are likely to have access to poultry, the industry has incurred losses of R4.8bn from culls and does not receive government support for losses from the mandatory culling of flocks. Across the world farmers forced to cull stock are compensated by their governments.
Deputy president Paul Mashatile suggested during an October National Council of Provinces meeting that support would be available for embattled farmers. Mashatile proposed a R3.5bn fund, a suggestion welcomed by the DA.
However, the availability of this fund remains undetermined, with various government sources, including the department of agriculture, the department of trade, industry & competition, the Sars tax service and the National Treasury indicating a lack of funding, according to SAPA.
SAPA said it remains “hopeful but uncertain about the establishment of an emergency fund, which we believe would greatly benefit a distressed industry”.
Chicken farmers were reporting financial losses way before the bird flu outbreak. Astral has been selling chicken at a loss of around R3/kg the whole year as consumers cannot pay more to mitigate the load-shedding costs. Astral will report its first ever loss in November since its listing in 2001.
When it cannot slaughter chickens as outages stop abattoirs from running, it must spend extra to feed the birds and keep them alive, a costly undertaking. It also had to run extra shifts to try and catch up on its slaughtering programme and cannot sell the larger chickens for more money.
At the same time, last month trade and industry minister Ebrahim Patel ordered the International Trade Administration Commission to investigate a rebate on duties on imported chicken in order to provide an incentive for imports and mitigate shortages. This was widely welcomed by chicken importers.
The local loss-making industry fears more imported cheap chicken will not allow them to put up prices in order to recover their high costs and will further add to their woes. They also say a rebate on duties and increased imports are not necessary as there won’t be a chicken shortage.
“Creating an emergency fund for farmers to recover costs and repopulate their flocks is much more beneficial to local consumers, producers and the SA economy than returning the taxes paid on a small portion of imports arriving in the New Year,” Breitenbach said.
“The suggested rebate is based on the assumption of a chicken shortage that may not materialise, and there is little expectation that such import rebates would significantly reduce consumer poultry prices.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.