Stressed pig farmers get some help to bring home the bacon
Businessman throws lifeline to an industry reeling from listeria hysteria and plummeting pork prices
A R100-million pledge from a businessman and an online trading platform may save the South African pork industry from going belly up.
A stalwart of the industry, Walter Frey of Frey's Food brands, has pledged his own money to underwrite the guaranteed floor price of R20 per kilogram for pig farmers. This as the latest price has plunged to as little as R10 per kilogram, causing huge concern for pig farmers and pork industry stakeholders.
The industry reported that producer prices fell by as much as 40% and resulted in millions of rands in losses following the national Health Department's announcement on listeria last month.
Industry representatives said the recent closure of various plants and abattoirs by big food industry players – as well as the catastrophic drop in the price of pork products – was a “dire crisis”.
Frey believes that Trigga – the first online trading platform that connects buyers and sellers of pork – and his R100-million cash injection are the type of support pig farmers need to survive the “listeria hysteria” storm.
“Our research indicates that our price guarantee of R20 per kilogram for farmers should be sufficient to keep them in business and ultimately survive this disaster. Sadly, we're getting to a point now that it's no longer just about the price. It's now also about helping farmers find a home for their product.“That’s where the efficiency of this online exchange comes into its own to connect producers and buyers – big and small – and ultimately to liberate and empower fair trades,” explained Frey.
Meanwhile, South African consumers who are facing tough times financially are benefitting from the lower price of pork.
According to FNB Agri-Business, pork is becoming appealing to consumers who can no longer afford other meats.
“Even though demand for processed and cold meats fell sharply due to the health and safety concerns from the listeriosis outbreak, pork farmers have now had to redirect the pigs for the fresh meat market thereby creating a surplus and in so doing have further increased pressure on low prices,” explained FNB senior agricultural economist Paul Makube.
Even though overall meat prices in general remain elevated, when excluding pork, meat prices at producer level are currently about 6% higher relative to last year, but marginally down on last year if pork is included.
The cost of maize, which is a large component of animal feed, is also working in consumers’ favour.
“South Africa now has a surplus in maize and the expected 2017/18 production is estimated at over 12.42 million tons. Therefore, if maize prices remain flat they will have a major impact in sustaining the lower prices for consumers,” said Makube.