January 11, 2022
South Africa to see consolidations in pig production industry
With profit margins under pressure, many smaller pig farmers in South Africa will leave the industry, while bigger farmers will consolidate and become more efficient, according to Johann Kotzé, chief executive officer of the South African Pork Producers' Organisation.
"Overall, we predict an exceptional year of innovation, because farmers are under immense pressure to produce affordable food while facing enormous rises in input costs. Feed prices are extremely high, and farm-gate prices haven't increased proportionately," Kotzé told Farmer's Weekly.
"I suspect we'll lose many farmers who farm between 100 and 400 pigs. They're really feeling the pinch."
Pierre Vercueil, a pig farmer in North West and former president of Agri SA, said although it was difficult to predict exactly what would happen during the coming year, he could confirm that the situation was very difficult.
"Our producer prices are at the same level as three years ago. At the moment, I think prices will move sideways."
Vercueil added that the impact of the COVID-19 Omicron variant would also be a significant determinant in the 2022 production year.
"If this variant leads to higher lockdown levels, it'll have a negative impact on consumers' ability to spend, and that in turn will reduce farmers' profitability," he said. He expressed hope that more people would receive the vaccine, as this would benefit the industry, and the country's economy "would remain open".
Kotzé added that South African pork producers were ingenious and would strive to become more efficient.
"Across the country, farmers have built massive new units that are set to come into production soon. Some of the best genetics in the world will be used at these state-of-the-art facilities, which will lead to greater efficiency," he said.
The industry had also suffered from the impact of African swine fever in 2021. However, Kotzé said he believed that as the disease had plagued the industry year after year, pork producers were mentally and emotionally capable of fighting it once again in 2022.
"People who do remain in the industry will have to stay positive. Our farmers have an unwavering belief in the future, that God will help them, and that the rain will fall," he said.
- Farmer's Weekly