Red meat consumption dwindles globally
Indications suggest that prices may increase by 2025.
In a report on the outlook of livestock products, Paul Strydom, CEO of the Livestock and Livestock Products Board, formerly known as the Meat Board of Namibia, stated: "Namibia does have a variety of export markets available and is thus somewhat buffered against local and regional influences on buying power."
According to Strydom, the Food and Agricultural Organisation’s (FAO) meat price index averaged 114.2 points in September, down 1.2 points (1%) from August, marking the third consecutive monthly decline and 6.1 points (5%) from its value a year ago.
“International pig meat prices fell, underpinned by weak import demand from leading importing countries, especially China.”
Strydom added that world poultry meat prices also dropped, reflecting the abundant supplies of leading global suppliers, especially Brazil.
“Ovine meat prices declined for the fifth straight month, albeit at a slower pace, driven by high supplies from Australia, despite steady demands from China and the Middle East.”
In contrast, strong import demand for lean bovine meat, especially in the United States of America, led to a rebound in international prices, notwithstanding high export supplies from Brazil and Australia.
He said the latest edition of the OECD-FAO outlook suggests that meat production could rise by 14% by 2032.
The same outlook projects that the global average per capita consumption of meat will increase by 3% from the 2020–2022 base period to 2032.
"The global meat trade is projected to grow much slower due to reductions in Chinese imports as production recovers fully from African swine fever. Therefore, it could be deduced that prices would be contained to some extent.”
Less spending power
According to Strydom, the past three years have been difficult for consumers due to weak economic growth, persistent high inflation and increased lending rates.
He said consumers move to cheaper meat cuts and other basic staple foods when the affordability of higher-value products such as meat becomes an issue.
“The effect of decreasing spending power became clear with farm-gate beef prices declining sharply.”
Strydom said South African exports, constrained by animal diseases such as foot and mouth disease, along with rising input costs, especially for feed and extreme weather conditions, have contributed to an oversupply of meat.
With the reinstatement of beef exports, production volumes are expected to increase, and prices are likely to remain under pressure in the long term.
Strydom said profitability in the South African meat sector has come under severe pressure in recent years due to persistent load shedding, animal disease outbreaks and haphazard municipal service delivery.
“Although total meat consumption has grown in the past decade, it is mainly more affordable products such as poultry and pork.”
Meanwhile, all sectors in the meat industry in Namibia recorded positive performances during the third quarter of 2023, posting favourable quarterly marketing figures in comparison with the third quarter of 2022.