SA pork producers feel the heat as feed costs soar

South African pork producers are under mounting pressure as high feed costs continue to strain their operations, driven by poor maize and soybean yields in 2024. The South African Pork Producers’ Organisation’s (Sappo) most recent report highlights the impact of a difficult maize and soybean production season.

“The 2024 season was hit by severe drought, reducing maize yields by 20% and soybeans by 35%. These poor yields have led to higher feed prices, which are expected to remain elevated until the next harvest,” states the report.

The report notes that planting intentions show slight increases in maize (0.15%) and soybeans (0.23%), with projected yields of over 15 million tonnes of maize and 2.5 million tonnes of soybeans.

‘Pork producers are losing money’

While international markets are seeing a general decline in feed product prices, according to the International Grains Council (IGC), the local situation remains dire. Lacing continued strain on local producers.

“Global production prospects remain stable but South Africa is still grappling with the aftereffects of drought. The feed prices will stay high until the harvest.”

Furthermore, Sappo reports that South African prices will remain sensitive to exchange rate changes with the Rand’s weakness following the United States election contributing to higher maize prices, particularly for white maize.

“Soybean prices rose less due to South Africa’s reliance on imported soybean meal, despite these challenges, recovery is anticipated in 2025, likely lowering soybean meal prices. Uncertainty remains, particularly around weather and exchange rates.”

According to Sappo’s chief executive officer, Dr Peter Evans, the rising cost of raw materials directly impacted production costs. “As feed is a significantly high percentage of production cost, current raw material cost has increased the cost of production markedly,” said Evans.

Despite these rising costs, market supply remains steady, with no noticeable decline in the number of pigs being marketed. However, producers are facing losses due to a combination of high input costs and weak consumer demand for pork.

“At current high feed prices, producers are losing money. Pork prices are also under pressure due to low consumer demand. Production of pigs is continuous, and because housing is planned to adequately accommodate the planned production, pigs need to be marketed and cannot be ‘kept back’ on the farm. There is no noticeable reduction in numbers of pigs marketed,” Evans said.

Hoping for good harvests

While logistical challenges often exacerbate regional disparities in agricultural production, Sappo confirms that feed cost challenges are affecting pig farmers nationwide.

These high feed costs have become unsustainable for pig farmers like Roland Trout from the West Coast of the Western Cape.

“I have a problem now, I can’t keep up, it’s too expensive and we don’t have moola. I feed them Novas feed but I can’t keep up with the grower feed,” he said.

While some farmers struggle to afford feed, others are finding ways to cope. Pig farmer Zintle James from Sterkspruit, Eastern Cape, explained how she has had to adapt by diversifying her income.

“Also for me, to always have money for feed, I came up with a plan that I should focus even more on my crops. So I was having cash crops last year. I’ve been selling a lot of spinach since it has been busy. With the amount of spinach I sell, I am able to buy the feed for the pigs. That’s how I manage,” she said.

As the pork industry navigates these ongoing challenges, Sappo’s report indicates a cautious outlook for the future. Critical rainfall is expected in early 2025, which could improve yields and help ease feed price pressures. However, much will depend on the weather patterns and the stability of the Rand.

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