The emergence of H7N6 highly pathogenic avian influenza virus has reduced the availability of broiler products, reflected in rapidly escalating prices to consumers. The effect of flock depletion will become apparent at the end of the current broiler cycle with prospects for lower availability and high prices extending into the pre-Christmas period that represents a seasonal peak in demand. Losses have occurred among breeder flocks as well as on grow-out farms. It is anticipated that South Africa will be forced to adopt vaccination as a preventive measure using products available in the E.U. and subsequently, locally manufactured vaccines.
The second problem facing broiler producers is the inadequate and inconsistent supply of power due to incompetence, corruption, lack of planning, investment and failure to maintain coal-fired plants and the national grid, Brown-outs are a continuing reality and producers are obliged to operate diesel-powered generators for farms and hatcheries and are unable to maintain regular plant operation schedules. Similar problems occur regionally with adequate supplies of potable water.
South Africa imposed antidumping duties of up to 260 percent for bone-in chicken that could have been supplied by Brazil in addition to duties imposed on leg quarters that would otherwise be supplied from the U.S. The Government of South Africa has also used avian influenza as a barrier against importation to protect the local industry, notwithstanding that the infection has been endemic in the nation for a number of years. Domestic requirements could have been satisfied by major exporters following World Organization of Animal Health guidelines on trade.
Labor is a further restraint to efficient and profitable production with militant unions demanding high wages and benefits and imposing ‘featherbedding’ Labor when available is generally untrained and unreliable.
The South African Poultry Association is in large measure responsible for the current problem as a result of combination greed in myopia. It’s apparently adopting an optimistic outlook maintaining that it will have adequate supplies of chicken to meet December demand for both eggs and broiler meat.
Over the first seven months of 2023 South Africa ranked 16th among importers received 30,994 metric tons of leg quarters from the U.S., down 21.5 percent from the corresponding first seven months of 2022. Total revenue declined to $29.9 million down 20.7 percent from January-July 2022. During July 2023 South Africa did not rank among the top 20 importers.
South Africa anticipates a 0.5 percent growth in GDP during 2023, has a claimed unemployment rate of 33 percent, a budget balance of -5.7 percent and an exchange rate of SA Rand19.2 to US$1, a deterioration of 11 percent over 12 months.