Some companies were hit harder than others, while Western Cape prices were less affected by the supply crisis, and small farmers made gains
The poultry industry, the largest is the largest South Africa’s agricultural sector, has taken major hits this year from an avian flu outbreak, causing retail prices of chicken and eggs to more than double in some parts of the country.
Some companies are hit harder than others, but the Western Cape has proven largely resistant.
Quantum Foods Holdings, South Africa's largest egg producer, announced an expected financial loss due to the avian influenza outbreak, projecting a decline in headline earnings per share (HEPS) to a loss between 16.7 cents and 18.1 cents per share. This contrasts with the 14.1 cents reported in the previous financial year.
The flu was reported in Gauteng, Mpumalanga, the Free State, Limpopo and Quantum was hit hard in Gauteng and North West Province, leading to a total loss of R155.3 million in biological assets.
Facing high feed costs, a weaker rand, electricity disruptions, and difficulties recovering increased production costs, Quantum's financial results, anticipated on December 1, are not expected to be rosy.
The Western Cape also faced an outbreak scare in October, and was the last to be hit. In the seven outbreaks in the Western Cape province, 1,569,702 birds were potentially exposed to the virus. But with no new cases reported since June, the province experienced the least fatalities.
Out of the exposed birds, 1,398,757 were culled and destroyed at a national level.
The outbreaks impacted poultry farms in the Garden Route area, causing egg shortages and price hikes due to containment measures. However, demand for eggs and chicken meat has not abated, perhaps assisted by the more moderate prie increases and higher purchasing power in the province.
Small-scale farmers, often less affected by the pandemic, capitalized on the demand to fill supply chain gaps, and weathered the outbreak well
The South African Poultry Association indicates that the industry is on the path to recovery, minimizing potential festive season shortages. The future impact on egg prices is unknown, but the recovery process 1is "well under way."
