According to Johnny van der Merwe, sheep prices are likely to remain low in 2023 and this is because of lower demand.
Van der Merwe is the managing director of agricultural markets analysis company AMT and believes that South Africa’s sheep industry has continued to decline due to the effects of devastating drought in some parts of the country, as well as lower prices in the aftermath of the COVID-19 pandemic.
He said although the improvement in production conditions was good news for local farmers, it meant the supply of animals on the market would rise, leading to lower selling prices.
“The feeder lamb price was 4% lower in January year-on-year and, along with the slaughter lamb price, is set to remain low until April,” he said per Farmers Weekly.
“After that, the usual increase for that time of year is expected, with the prices peaking in July.”
Adding to van der Merwe’s sentiments is Professor Johann Kirsten, who is the director of the Bureau for Economic Research at Stellenbosch University, his findings depict a picture that sheep production in the Northern Cape had declined by 25% over the past two years due to the ongoing devastating drought.
“The total number of sheep slaughtered per annum [normally] varies between four million and five million head. [But this figure] dropped by one million over the past three years due to the devastating drought in the Karoo region and the impact of the COVID-19 pandemic,” he said.
“The three provinces that make up the Karoo region, namely the Eastern, Western and Northern Cape, jointly account for 64% of all sheep slaughtered in South Africa.
“Taking data from the 14 major abattoirs in the Karoo, we can identify the impact [of the drought] through the decline of the monthly slaughter numbers in the region.
“Essentially, the abattoirs in the Karoo region have faced financial difficulties, especially over the past three years, due to the decline in slaughter numbers.”
Meanwhile, sheep farmers on the Highveld were faring better in terms of production conditions, but low prices and a high prevalence of stock theft were placing them under severe strain.
Jan Grey, a sheep farmer near Bethal, Mpumalanga, said grazing conditions had been exceptional over the past year, but prices did not make up for theft.
“Consumers are at the end of their tether because of the price hikes. Even at the lower prices, lamb is still a luxury [item], and between school supplies, fuel and electricity, it isn’t at the top of the grocery list,” he concluded.
