The Poultry and Egg Industry
The Department of Agriculture, Forestry and Fisheries (DAFF) reports that the poultry and egg industry contributed 42% of gross agricultural animal product and almost 21% of total agricultural gross product value in 2015, with the poultry meat sector delivering gross value of R38.8bn and the egg sector R9.8bn. The industry sector, and the well-being of many industry players is currently severely challenged by the effects of the drought, escalating feed prices, tight operating margins, new brining regulations, increasing imports and production management labour issues, all of which have directly or indirectly resulted in considerable corporate action over the period, with ongoing industry consolidation forecast.
Drought and Imports
The industry faces an unprecedented influx of poultry meat imports into the country from existing exporters, the resumption of AGOA imports from the United States as well as anticipated new entrants without import caps, such as Poland. The resultant oversupply, in conjunction with reduced consumer spending on meat and eggs, rising feed prices due to drought induced diminished local harvests of primary raw materials, and increasing costs of imported raw materials continue to pressure producer prices. The survival of a number of industry players hang in the balance, corporate activity is high and further industry consolidation is expected.
The Poultry and Egg Industry considers the current circumstances confronting industry players and the various approaches being adopted in response. The report profiles 16 industry players, including chicken meat market leaders RCL Foods, Country Bird Holdings, Astral Foods and Quantum Foods, Egg industry leaders, Quantum Foods, Top Lay, Alzu Eggs and Kuipers Group, and Ostrich industry players Roelcor Holdings, Mosstrich and Klein Karoo International.