Variable climatic conditions, macro- economic fluctuations, trade wars and land reform policy uncertainty will remain some of the biggest factors impacting on the South African agriculture sector for the foreseeable future, according to the Bureau for Food and Agricultural Policy’s (BFAP’s) agricultural outlook for 2018 to 2027.

With South Africa’s meat prices being in deflation over the past few months, one would easily assume that the beef industry has recovered from the 2015/16 drought which led to a reduction in the herd. Figure 1 illustrates South Africa’s cattle herd, and boy, we are not back to levels we were before the drought.

So, where did the illusion that cattle herd has somewhat recovered come from?

You see, the years following this period of higher cattle slaughtering when farmers couldn’t feed their stock — 2017 and 2018 — was for rebuilding the herds, which meant a reduction in slaughtering pace. This process was reflected on meat prices, which at the time were rising double digits, particularly from February 2017 until March 2018. Thereafter, we started to see some cooling off in meat prices, as slaughtering activity, on a monthly basis, began to gain momentum, albeit not back at levels during 2015/16 drought. In March 2019, South Africa’s meat prices were actually in deflation, registering -1.1%, according to data from Stats SA.

But the factors leading to the deflation in meat prices wasn’t a recovery in slaughtering activity, but the ban on South Africa’s red meat exports following the outbreak of the foot-and-mouth disease in Limpopo earlier in the year. The theory at the time, simplistically, was that a ban on exports would lead to increased domestic meat supplies, and therefore a decline in prices. It had less to do with the herd rebuilding progress.

Because of this, the meat price deflation story could soon be over because of the following. First, a number of African and Middle East countries have recently lifted the ban on South Africa’s beef exports.  This means the impact of the foot-and-mouth disease might not be as severe as initially expected. Second, it is worth noting that South Africa’s cattle slaughtering activity is slowing, and this could add support to prices in the near term. Third, aside from red meat, poultry products prices could lift somewhat in the coming months, as there is likely to be an uptick in import tariffs.

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Here is a piece advice for Farmers- if it's still applicable. African and South African farmers maybe different accoding to USA and UK farmers- but their is alot in common.

 I noted that SA farmers have had one of the toughest years because of the combined effects of drought and animal disease that affected production and trade. But this is only one side of the story.