No, you are not imagining it. The price of boerewors and other meat have really been skyrocketing – and it is not just because retailers wanted to cash in during the recent Heritage Day long weekend.
Earlier this morning, a kilogram of the good ol’ favourite Grabouw boerewors was priced at R124.99 at Woolies while Checkers Sixty60 came in at R79.99 – considerably cheaper than a few days ago.
If you think that is expensive, wait until you hear what experts have to say about meat prices in general: it most certainly has been increasing dramatically over the course of the year, and consumers are struggling to keep up.
Dawie Maree, head of agriculture information and marketing at FNB, pins the increase in meat prices to a shortage of meat in the market due to drought and the rising prices of animal feed and input costs.
“It is mainly because farmers are still building their herd after the drought, so the supply of meat is fairly limited at this stage and that’s why meat prices show an increasing trend because the demand is still there.”
And no, it is not farmers who are cashing in on the rising meat prices. Maree says, much like consumers, the country’s farmers are price-takers. In other words, they have no choice but to accept prevailing prices in the market. Just because you are paying more for meat, does not mean that the farmer’s bank balance is growing.
“We are on the one end of the chain, and they are on the other end of the chain, so both consumers and farmers are price-takers. They can’t transfer the increasing cost to somebody else, so they have to absorb that, but up in the [value] chain people can transfer the costs,” he says.
Meat the culprit in food inflation
Meanwhile, Paul Makube, a senior agricultural economist at FNB, indicates that meat could be singled out as the biggest culprit in the uptick in food inflation. This is given its weight in the food basket after posting a double-digit increase of 10.7% year-on-year.
“The combination of supply constraints due to the reduced pace of beef and sheep slaughter and the decreased volumes of poultry imports underpinned the recent uptrend in meat prices,” he says.
He reveals that herd rebuilding remains on course largely due to the good feed availability after fantastic seasonal rains and has thus reduced the availability of cattle for the slaughter market as producers hold back on their stock.
In the poultry market, Makube confirms a 3.5% contraction in imports which caused supply tightness and the subsequent uptick in prices. Additionally, consumer demand for meat remained unseasonably solid despite the current economic challenges.
He says the vegetables and fish categories also added to the upswing in food inflation with increases of 5.6% and 6% year-on-year respectively, but were to some extent offset by the deceleration in the bread and cereals, oils and fats, and the milk, eggs, and cheese categories.
It has been a long time coming…
In the latest essential food pricing monitoring report released by the Competition Commission, meat markets have shown a steady increase in retail prices since the first wave of the Covid-19 pandemic.
“While wholesale producer price inflation (PPI) beef prices have remained relatively constant over the period, with a slight increasing trend since November 2020, retail beef products have shown considerable price movements, especially seen with stewing beef, which has increased by almost R15 per kilogram,” the commission found.
The beef chuck price rose from around R80 per kilogram in April 2020 to around R100 per kilogram in June 2021.
These price movements had also been observed in mutton/lamb, chicken and fish, where wholesale prices had remained fairly stable, while retail prices had increased overall.
The commission’s July and August report showed meat prices continued to be high.
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