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ON FARM LEVEL
Value chain
Putting it in a broader perspective, the annual raw material demand
for animal feeds was only simulated on imports of 65 000 tons of
chicken meat per year.
Chicken meat imports to South Africa has increased sharply over
the past two years (2015 and 2016) and the chicken meat imports
for the first ten months (January to October) of 2016 accumulated to
449 592 ton. The average imports for 2015 and January to October
2016 were 453 483 ton.
Under normal circumstances South Africa is a surplus producer of
maize. Over the past ten years the production of maize has also in-
creased and created a surplus. This means that the expansion and
creation of new markets are very important for maize producers to
ensure they are sustainable in the long run (
Graph 4
).
Soybean production in South Africa has also increased over the
past few years. In addition, the local demand increased due to large
investments within the local processing capacity. This means that
it is very important to develop and sustain a local demand for oil-
cake, otherwise these expansions will not be sustainable in the
long run. As indicated above in terms of feed within the oilseeds
industry, the broiler industry is very important for the consumer.
In terms of feed prices, the drought and the dependency on im-
ports resulted in price increases. This resulted in prices moving from
low export parity prices to high import parity price levels.
However, historically under normal conditions yellow maize prices
traded at levels closer to export parity levels due to surplus produc-
tion, which means that this is favourable in terms of feed prices. The
expectations are that prices can move closer to export parity levels
again if crop conditions are favourable in the new production sea-
son, providing there is some relief in feed prices.
In conclusion, the poultry industry is a very important role-player
within the grain and oilseeds value chain. If local poultry produc-
tion decreases due to producers not being able to be competitive
against imports, this will not only have an impact on job creation
and economic opportunities within the poultry industry, but it can
also have a multiplier effect on other industries such as the grain and
oilseeds industry.
This is mainly due to the fact that the poultry industry is an important
consumer within that value chain.
Graph 4: Local production and consumption of maize.
Source: SAGIS 2017
Graph 5: Import and export parity prices of yellow maize.
Source: Grain SA
Grain SA/Sasol photo competition
– Alrich Wolmarans 2014
Importance of the poultry industry