The South African Poultry Association (SAPA) says the sector remains vulnerable to renewed outbreaks of avian influenza, particularly as many European countries and most of the US are currently experiencing highly pathogenic avian influenza outbreaks.

SAPA explains that local efforts to implement widespread vaccination against avian influenza have stalled and that, to date, no farm has been able to adhere to the stringent biosecurity protocols required for vaccination approval.

Without vaccination, the sector is at risk of new outbreaks, which decimated the industry in 2023. SAPA confirms that some farms are still recovering from the 2023 avian influenza outbreaks, which leads to idle capacity in the country’s slaughtering.

Farmers are also impacted by the lack of compensation for culling, fluctuating trade dynamics and rising feed costs owing to a stronger dollar and a weaker rand.

The industry has increased its slaughter capacity from 19.5-million chickens a week to 22.5-million chickens a week in recent years; however, it is currently only slaughtering 21.5-million chickens a week.

The domestic poultry industry is valued at R65-billion, making it the country’s second-largest agricultural sector and employing nearly 58 000 people across the value chain.

Two highly pathogenic avian influenza strains were involved in the 2023 outbreaks – H5N1, which has affected countries worldwide, and H7N6, which is a unique strain to South Africa.

Currently, three H5 vaccines have been approved for import, but the mandated testing protocols mean that H7 vaccines are still months away from approval.

SAPA says that, although weekly negotiations with the South African government continue, a practical and implementable solution remains elusive.

The poultry industry is calling on Agriculture Minister John Steenhuisen to intervene and compensate farmers for culled chickens, as well as facilitate vaccination. This would be vital steps to safeguard the future of poultry production in the country.

“With Europe’s avian flu season starting early and spreading aggressively, and three more US states being shut down in the last month due to the virus, South Africa must prioritise vaccination to mitigate similar outbreaks, as the standard biosecurity protocols – stringent as these may be – are not sufficient to curb an outbreak,” SAPA states.

TRADE

SAPA further reports that total chicken imports increased in 2024, compared with 2023, barring the imports of bone-in cuts.

The increased imports were driven by mechanically deboned meat and offal, which face no tariffs.

Argentina has been the latest country to flood the South African market with cheap chicken, putting local producers under pressure. Argentina is not among the countries that the South African government have subjected to higher tariffs as an anti-dumping measure.

On the other hand, SAPA says the industry has made notable progress in opening more export markets for local chicken, with residue monitoring programmes having been submitted and inspections by the UK and Saudi Arabia having been arranged in coming months.

These inspections are crucial toward gaining access to the UK, the EU and Saudi Arabia markets, particularly for cooked chicken products. SAPA does not envision exports of uncooked chicken to these markets at this stage.

PRICING

While new avian influenza outbreaks undoubtedly remain the poultry industry’s biggest concern for this year, the price of essential chicken feed components such as maize and soybeans is another concern.

SAPA says improved operational efficiencies in 2024 on the back of lower feed costs and reduced loadshedding helped; however, challenges such as deteriorating infrastructure and rising energy costs continue to put strain on producers.

“While the average producer price for broiler chickens increased in 2024, offering some relief, producers remain cautious. With no vaccination protocols or compensation for culling, many farmers are hesitant to expand production, focusing instead on recovering from 2023’s difficulties,” SAPA notes.

In turn, consumers also remain under significant financial strain, with retail price increases continuing to affect food purchases.

To this end, SAPA, the Association of Meat Importers and Exporters and other industry stakeholders have requested value-added tax exemptions on frozen chicken cuts and offal.

The association believes such measures would provide relief to lower-income households and support local producers to supply cost effective chicken products.