RCL Foods reported that its subsidiary Rainbow Chickens depopulated 400,000 broilers following exposure to H7 highly pathogenic avian influenza that is currently impacting all poultry segments in South Africa including competitor Astral Foods. For FY 2023 the Chicken segment of RCL Foods generated an EBITDA of $1.8 million on revenue of $710 million before the full impact of the current H7 epornitic was apparent. The Chicken segment produced approximately 3.5 million birds per week and manufactured 1.4 million tons of feed with half of the quantity consumed by company flocks.
Despite the prematurely optimistic comments by the South African Poultry Association, (SAPA) the nation will be short of chicken for the Christmas surge in demand. This will result in widespread consumer disaffection given that chicken is the major animal protein across all demographics. It is inevitable that questions will be raised concerning the influence and involvement of SAPA on government agencies that placed protective duties on imported chicken that would otherwise have satisfied demand. Shortage of chicken during December will intensify criticism of the ruling African National Congress that has been in power since the end of Apartheid. Voters in the predominately black nation complain of soaring unemployment, deteriorating infrastructure, power failures, shortage of water and uncontrolled crime.
Avian influenza must now be regarded as endemic in the Republic of South Africa. Given the variable level of biosecurity and the vast backyard and subsistence population of chickens, the commercial industry will only be viable following adoption of an effective vaccination policy to provide durable immunity to both broilers and long-lived breeder and egg-production flocks.