South Africa’s red meat and wool exports are on path to recovery

South Africa’s red meat and wool exports are on path to recovery

The past two years presented major challenges for the SA livestock industry, especially the spread of foot-and-mouth disease and higher feed costs.

As farmers, feedlots and government worked to control the spread of foot-and-mouth, the effect on the revenues of farming businesses was deepening as they had to limit the movement of animals. Some export markets were temporarily closed.

In the case of the beef industry, in 2022 exports fell below the prior five-year average, totalling 26,881 tonnes, down 16% year on year, according to data from Trade Map. They recovered by 3% in 2023 to 27,675 tonnes.

Even as the beef industry confronted these challenges it had already resolved that widening the export market was the best way to catalyse long-term growth. Indeed, between 2017 and 2021 SA’s overall beef exports averaged 31,169 tonnes, notable progress compared with the average of 26,670 tonnes for the prior five years. In the five years before that, average exports were less than 15,000 tonnes. The spread of animal diseases threatened this export growth.

Between 2017 and 2021, exports comprised 49% fresh beef and 51% frozen beef, on average. The export markets were also diverse. For fresh beef, Kuwait, Jordan, the United Arab Emirates (UAE), Mozambique, Lesotho, Qatar, Zimbabwe, Mauritius and the Netherlands were the largest and most consistent markets.

Similar markets and new ones were at the top of the list for frozen beef. These included Lesotho, Mozambique, China, the UAE, Jordan, Egypt, the Netherlands, Qatar, Hong Kong and Kuwait.

Fortunately, while some regional markets were temporarily closed to SA red meat products, some remained open. Exports therefore did not collapse in 2022 and 2023, when animal disease was a major challenge.

This challenge was not limited to the cattle industry. Although the wool industry was not directly affected by foot-and-mouth, some export markets closed temporarily due to related concerns. China, which accounts for more than two-thirds of SA’s wool exports, temporarily closed for various periods in 2022 and 2023.

The effect of those temporary closures is visible in wool export volumes. In 2022, SA’s wool exports fell 19% year on year to 42,239 tonnes. The major decline in volume was in the Chinese market.

Safety measures

Fortunately, engagements between the SA and Chinese authorities to reassure them of the safety measures in place to ensure there would be no spread of disease led to the resumption of exports. SA’s wool exports in 2023 recovered 18% year on year to 49,715 tonnes.

The higher feed costs were a factor outside the control of farmers and regulators. This was not unique to SA but a global phenomenon. The rise in Chinese demand for grains, coupled with drought in South America, higher shipping costs and the Russia-Ukraine war were major drivers of grain prices over the past two years. SA is interlinked with the global market, so the rise in international grain prices was felt here too.

There is also a transformation and inclusivity agenda in the performance of the wool and beef industries. These industries are among the agricultural subsectors with a large share of new-entrant black farmers. Therefore, the financial strain of the past few years might have disrupted progress stakeholders were making in the transformation drive in these industries. National Agricultural Marketing Council data shows that black farmers account for roughly 18%, 13% and 34% of wool, mohair and cattle production, respectively.

Livestock is a key part of the SA agricultural economy, accounting for nearly half of the gross value added when combined with the poultry and piggery industries. The past two years were certainly challenging for the SA livestock industry. Fortunately, the path forward is looking more promising and exports are recovering.