Overview of the SA poultry industry
2012 to 2016
Growth trends: Percentage change vs previous year
1.1. Broiler industry trend
The broiler production trend depicted in Graph 1 is based on the actual number of day-old broiler chicks hatched per month, as reported by broiler hatcheries. The trend line shows how the industry has reacted to an oversupply of chicken meat caused by increasing levels of imports. High feed prices due to the prolonged and severe drought in South Africa have also played a role. During the past five years there has been very little growth and ultimately contraction, as producers have either cut back on production or exited the industry.
1.2. Egg industry trend
The trend in table egg production follows a similar pattern. Egg producers have been under enormous pressure owing to escalating feed prices and disease challenges. Margins have been squeezed because retailers are resistant to producer price increases. A number of small and mediumsized producers have in recent years sold their farms or closed their businesses.
2. Poultry stock number trends 2.1. Broiler industry: broiler parent and broiler chick numbers
The projected broiler breeder flock number, based on actual weekly numbers of day-old broiler parent pullets placed, is presented in Graph 2.1. It is assumed that pullets are moved to the breeder flock at 20 weeks of age and
depopulated at 61 weeks of age. Despite the turbulence in the industry the flock has shown steady growth since 2012, only exhibiting a downward trend in mid-2016. The lengthy supply chain from breeding to processing makes it difficult for the industry to react quickly to changes in market conditions.
The potential number of broiler chicks produced per week follows the same trend as the breeder flock.
It is assumed that the actual number of broiler chicks hatched is a true reflection of broilers placed on South African farms. The discrepancy between actual and potential chick placements from 2012 to 2015 may be due in part to lower than expected hatching egg numbers, and exports of day-old chicks. Reasons to account for the widening gap in 2016 include the sale of surplus hatching eggs for table consumption, early depopulation of breeder flocks, and exports of hatching eggs – which account for about 10% of the difference.
2.2. Egg industry: day-old pullet, point-of-lay pullet and laying hen numbers
In Graph 2.2 the egg industry bird numbers are presented as trend lines. The downswings in 2012 and 2016 may be attributed to periods when year-on-year increases in feed prices outstripped increases in farm-gate egg prices. The weak domestic economy and rising unemployment, coupled with growth in retail margins, contributed to a gradual decrease in per capita consumption of eggs over the five-year period. Producers
have responded by reducing their flock sizes.
3. Actual broiler production per annum
As indicated in Graph 3, annual broiler production decreased in 2013 and 2014. This was followed by a period of growth (+4.8%) in 2015, and shrinkage (-3.0%) in 2016. Based on the reduction in the size of the broiler breeder flock, the total number of broilers produced is expected to decline in 2017.
4. Eggs produced per annum
Following two consecutive years of reduced volumes, annual egg production increased by 2.0% in 2015 and remained fairly stable in 2016 (Graph 4). Based on the decreasing trend in laying hen numbers, the total number of 30-dozen cases is expected to decline in 2017.
5. Poultry meat production
The total tonnage of meat produced per annum from the slaughter of broilers, plus live sales of breeding stock and commercial laying hens, is presented in Graph 5. In 2016, 1.612 million tonnes of chicken meat were produced; 2.9% less than in 2015. The contribution of broilers to the total meat tonnage amounted to 95.4%.
6. Feed usage by poultry industry
The total feed tonnages consumed by birds in the broiler and egg production sectors of the poultry industry are presented in Graph 6. In 2016, the broiler industry consumed 74.0% (3.340 million tonnes) of the total feed required by the industry, down from 74.3% the previous year.¡