SOUTH AFRICA - Over the past decade, meat consumption in South Africa has expanded rapidly as a result of growing income levels, continued urbanisation, rising living standards and ever increasing dietary diversity.
Despite being a small industry, the pork sector in South Africa has fairly intensive production systems and feed contributes a substantial share of production costs.
The pork industry only represents a small share of total meat consumption in South Africa. Between 2013 and 2015 it represented less than 8 per cent of the total meat complex.
Consumed fresh, pork represents an affordable alternative to beef and lamb, but a substantial share is also consumed in processed form, implying significant value addition. Thus while fresh pork represents an alternative to rising beef prices, processed pork is also often consumed by higher income consumers, where the impact of the economic slowdown is less evident.
Thus, firm consumption growth is projected over the next decade, with domestic use exceeding 300,000 tons by 2025. Production has also expanded over the past decade and while South Africa has remained a net importer of pork products historically, the share of imports in domestic consumption has remained fairly consistent.
Import composition, which consists predominantly of ribs, suggests that it has a role in balancing the domestic market by supplying only the cuts in highest demand. Thus the share of imports in domestic consumption is projected to remain fairly constant over the next decade.
Despite the projected increase of more than 8 per cent in pork prices in 2016, profitability is under pressure as a result of high feed costs and similar to other livestock sectors, the pork to maize price ratio is projected to fall to its lowest level to date in 2016.
Recovery is evident in 2017 however and over the course of the next decade, pork prices find support from beef, inducing production growth in response to rising demand. By 2025, pork production expands by an annual average of almost 3 per cent, only marginally slower than the past 10 years.
Over the past decade, rising carcass weights and improved efficiency have been the main constituents of production growth, as opposed to increased sow numbers. While improving efficiency is no doubt positive, significant increases in production in the future will be dependent on continued improvements in efficiency as well as greater investment and expansion of the sow herd.
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