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Expected implications of the 2015 drought on the red meat industry

8 Feb 2016

During 2015 South Africa was dry, very dry. While city dwellers and villagers blame the local municipality because of water restrictions and the municipality's inability to limit water wastage due to poor infrastructure, few of them were really aware of the actual impact of the drought.

Legacy Building Solutions via Wikimedia Commons

Which city dweller complaining about the fact that his grass withers know the heart of a farmer sitting on his knees in a cultivated land and only smells dust on the soil in his hands.

The year of 2015 is now officially declared as the driest year since 1904 in South Africa (SA Weather Service) as the lowest annual total rainfall for the country was recorded. Although large parts of the country received good rains in the second half of January 2016 it does not really soften the harsh implications of the drought in the short and medium term.

The implications of the drought have an effect on the country as a whole and it is basically impossible to estimate the effect by using only one sector such as red meat. As the price of a commodity is determined by supply and demand factors in the economy, it is important to take a more holistic approach in order to derive an estimate for a single sector. The price of feed is also a large determinant to the demand for South African weaned calves and lambs as it is a determinant to the demand for weaners from the feedlots.

Read the full report here.