September 21, 2023

Challenges Impacting SA’s Poultry Industry: Insights for All Stakeholders

Photo credit: Farmer Eddie

In the heart of South Africa’s poultry industry, a dynamic landscape is witnessing a confluence of challenges with far-reaching implications. Astral Foods Limited, a prominent player in this vital sector, has shed light on these multifaceted issues through a recent update.

These challenges encompass load shedding costs, pricing pressures, the bird flu outbreak, and a challenging financial outlook, echoing across the industry and impacting Astral Foods, farmers, and consumers alike.

Load Shedding Challenges: Load shedding has significantly raised production costs for poultry farmers. This includes expenses for additional diesel to power generators, cutbacks in production due to program delays, and higher feed costs. These added costs may affect poultry prices for consumers.

Price Pressures: Poultry prices are under severe pressure due to deep-cut promotional activities. Chicken consumption patterns also naturally slow during the winter season. As a result, poultry selling prices have not kept pace with input costs, potentially leading to price increases for consumers.

Bird Flu Outbreak: A Highly Pathogenic Avian Influenza (bird flu) outbreak is affecting both table egg and poultry meat supply. This has led to additional expenses for farmers, including culling broiler breeding stock and implementing disease control measures. Supply disruptions are possible, which may impact prices and availability.

Financial Outlook: Astral Foods Limited anticipates a significant decline in earnings per share (EPS) and headline earnings per share (HEPS) for the year ending 30 September 2023. This could result in a loss compared to the previous year. Farmers’ financial challenges may impact their ability to meet consumer demand.

Industry Resilience: Despite these challenges, the industry remains resilient, with farmers and producers working to maintain supply. Staying informed and supporting local poultry producers during these challenging times is crucial for both farmers and consumers.

In summary, load shedding, pricing pressures, the bird flu outbreak, and financial challenges are key issues affecting South Africa’s poultry industry. Farmers are striving to maintain supply, but consumers should be prepared for potential price fluctuations and supply disruptions in the near term. Supporting local poultry producers can help ensure the industry’s resilience in these challenging times.