Listeria fallout hits pork industry hard
Small-scale farmers 'will be the first to go' as the price of a pig drops by half and processing plants shed jobs
South Africa's pork industry is losing about R45-million a week owing to “listeria hysteria”, and experts warn that many small-scale pig farmers will not survive the plunge in demand for pork.
South African Meat Processors Association chairperson Arnold Prinsloo said about 2,000 jobs have already been shed at processing plants.
“Enterprise had 300 people laid off; another large company laid off 150. A process plant in the Free State laid off 200 people and in Durban a plant laid off about 300 workers. Then there are a lot of small guys who have shed jobs.”
According to him, listeriosis has cost the processed meat industry R800-million per month.“Packaging, transport and spice businesses are losing R100-million per month. Small butcheries are also adversely affected as consumers are no longer buying processed meat due to the minister’s warning against the whole industry.”
South African Pork Producers’ Organisation CEO Johann Kotze said the price of a pig had dropped between 40% and 50%.
“We are not a big industry. A 12% or 15% drop in demand has a major impact on price and then on supply. The pork industry is losing about R45-million a week.”
He said the first to go would be the small-scale farmers who couldn't survive the price decrease.“A huge barrier is capital. The moment you lose the small farmer, [for him] to get back into the industry is extremely difficult.
“When demand goes down people buy from farmers with the best quality and best production systems. What do you do if you are a small-scale farmer? You will slaughter yourself. This creates a food safety issue [because] there is no control system.”He said an independent food council should be set up to regulate food safety and set a specific protocol for outbreaks.
“The perception is that all cold meat and ready-to-eat meats aren’t safe."
Kotze said that for the best-quality pork, pigs were slaughtered at 22 weeks and that machinery at processing factories was equipped to accommodate a specific size carcass.
“The pig literally outgrows the form needed to be processed.”
Nkululeko Luthuli, one of the owners of BestCut Meats in Empangeni, said they had decided to suspend operations while they waited for results from the Health Department, which visited the factory on February 5.
They eventually had their own test done, which did not pick up any trace of listeria.
“Having done no sales for the last few weeks has had terrible financial implications for the business,” Luthuli said.They had paid staff for March, although the factory was not operating, but Luthuli said they would not be able to pay workers this month. “Naturally, people will start to look for alternative income and some may resign. We are going through that process.”
He said they were trying to start up production again, but it had been a challenge. “The industry is still quite depressed.
“I haven’t heard of anybody closing permanently. There have been temporary shutdowns. There are quite a number of factories working on short time. There have been about 2,000 employees laid off. There have been massive revenue losses.”
CP Kriek, who owns a pig farm between Fochville and Potchefstroom, said he was making a “dead loss” with the poor prices he was getting for his pigs.He produces 900 pigs a week, 600 of which went to Enterprise, whose Polokwane factory has been identified as the source of the deadly ST6 strain of listeria.
“We have a lot of workers depending on us. My business is quite old so it’s fairly labour-intensive. We have about 90 permanent workers.”
Kriek said Enterprise had continued to buy pigs from him at a reduced price, even though they had not been operational.
“As I understand, it’s being boxed and frozen in cold storage. At least they are trying their best to accommodate us and keep our farms going. You can’t store a pig but you can store pork,” he said.
“I won’t be able to carry this for an extended period of time … [but] the biggest loser, I think, will be marginal, developing farmers. The guys that do not have a lot of reserves. Those guys might take a big knock.”Prinsloo added that, currently, the entire industry is experiencing a huge reduction in volumes sold. Polony and vienna sales have gone down by 75% and other processed meats have dropped 50%, whereas fresh pork has gone down by 40%.
He said a large abattoir north of Johannesburg, which slaughters 6,000 per week, will shut down next week for commercial reasons.
“The 6,000 additional pigs in the market coupled with the reduced demand for pork and processed meats have resulted in a significant drop in the selling price for pigs from R26 per kilogram to R16 per kilogram. This is a disaster for farmers as they will be selling at a loss and small farmers will lose their farms.
“The knock-on effect will create a shortage in the market in 12 to 18 months. This shortage will push up pork prices to an estimated R30 per kilogram should the demand for pork meat and processed meat have increased by that time.”