The industry’s resilience in 2024, despite significant headwinds, suggests potential for recovery in 2025, particularly if consumer spending improves and export markets continue to develop. However, success will depend largely on opening more markets, effective disease management and favourable weather conditions.
The South African beef industry faced significant challenges in 2024, due to the country’s low economic growth environment, though several bright spots emerged, particularly in exports. This mixed picture provides cautious optimism for 2025, according to Beefmaster Group.
“Last year was tough for the business and our industry,” says Gert Blignaut, CEO of Beefmaster Group. “Slaughter prices continued to fall, input prices such as feed prices continued to rise, and farmers’ calf prices couldn’t get off the ground. The consumer faced significant financial strain, resulting in low spending.”
Despite these challenges, production volumes showed remarkable resilience.
“It is likely that we reached the highest slaughter figures of the last six years, with about 2.8 million cattle going to slaughter in SA,” Blignaut notes. However, this increased supply and lower demand due to constrained consumer spending, put additional pressure on prices throughout the year.
A significant bright spot in 2024 was export performance.
“It is likely that last year we exported the highest volume of beef in the last six years, in the region of approximately 38 000 tonnes,” says Blignaut.
However, he emphasises that exports only represent about 5% of production, indicating substantial room for growth.
With beef being the second fastest growing commodity in the agriculture sector, according to research from the Department of Agriculture, Land Reform and Rural Development (DALRRD), expanding export markets remains crucial. Blignaut remains optimistic and the potential for improved export numbers exceeding 5% through collaboration with industry stakeholders and DALRRD.
He says the opening of the Saudi Arabian market was another positive development in 2024, along with other encouraging factors such as the GNU formation and the start of an interest rate reduction cycle, which could stimulate consumer spending this year. He is also encouraged by the reduction in loadshedding experienced in 2024. Recently Eskom announced that it had gone for 300 days without loadshedding, the first time since 2018, with savings in diesel expenditure of R16.42-billion. Blignaut says that this bodes well for businesses in 2025, who had suffered losses in previous years due to rolling blackouts.
He says that the outlook for 2025 carries both promise and challenges.
“We suspect that going into 2025, the consumer may start spending more. Possible further interest rate cuts, combined with the current outlook for the year, may mean we could be in a for a better year,” Blignaut says.
However, he cautions about ongoing challenges, particularly regarding Foot-and-mouth disease (FMD) management, the highly contagious viral disease that affects cloven-hoofed animals and has persisted in SA.
“We are also concerned about drought conditions and how this may impact primary producers.”
According to agricultural economist from Agbiz, Wandile Sihlobo, a mid-summer drought in 2024 negatively impacted the agricultural sector leading to extensive crop losses. Climate experts at the start of this year warned about uncertainty regarding weather cycles, making forecasting and the prediction of rains, difficult.
Yet, Blignaut is cautiously optimistic about the year ahead. “Primary producers, keep doing what you are doing. Tenacity is a superpower. Hang on, the rain will come.”
