Figure 1: Broiler meat production* and gross value
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1 Million Kilograms Million Rands QUARTERLY BROILER MARKET ANALYSIS BULLETIN 1 OF INTRODUCTION The following discussion is a review of the broiler meat market environment. The analysis is updated on a quarterly 1 basis and the interval covered in the current issue is from October 213 to December 214. This period is divided into five, three months long quarters. The key issues discussed in the review are trends in production, price, trade, growth and volatility. 2. PRODUCTION Broiler meat production volume and gross value during the period under review is presented in Figure 1 below. Figure 1: Broiler meat production* and gross value Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Production Gross value Source: SAPA. * Broiler meat production includes the production of commercial and subsistence farming. 1 Quarter 1 (January March); Quarter 2 (April June); Quarter 3 (July September); Quarter 4 (October December) 1
2 Rands/Kg Broiler production and its value varied throughout the five quarters with the highest level of production volume and value realized in Q4 of 214 and the lowest in Q Quarterly production volume of broiler was 452 million kilograms in quarter 4 of 214. Broiler meat production and its gross value experienced an increase of 3% and 12% respectively during quarter 4 of 214 relative to quarter 3 of 214 and increased by 6 % and 19% respectively when compared to same time in the previous season (quarter 4, 213). 3. PRICE TREND OF BROILER MEAT Figure 2 below illustrate the average quarterly prices of broiler meat during the five quarters under review Figure 2: Average broiler meat producer prices Source: SAPA. Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Price The broiler meat market consists of 9% frozen meat and 1% fresh meat. Therefore the average broiler meat prices are calculated from both frozen and fresh broiler meat. The average producer price of broiler meat moved at an increasing trend from quarter 1 of 214 to quarter 2 of 214 and decreased slightly in quarter 3 of 214. There was an increase of price in quarter 4 of 214 of R1.39/Kg (8%). The new peak was reached in quarter 4 of 214 which might be due to the reduced cheap imports into the country. There was a significant increase of R1.95/Kg (12%) in quarter 4 of 214 compared to quarter 4 of
3 MillionKilograms Million Rands 4. IMPORTS AND EXPORTS Volumes and values of quarterly broiler meat exports are presented in Figure 3 below. Exports quantity decreased from quarter 1 to quarter 2 of 214 and exports value picked up during second quarter of 214 to quarter while quantity improved during quarter 3 and 4 of 214. Broiler meat exports (quantity and value) reached a new peak during quarter 4 of 214. Figure 3 further shows that it has been unprofitable to export broiler meat during the period under analysis since more quantity was exported at a lower value Figure 3: Quartely broiler exports Q4 '13 Q1 '14 Q2 '14 Q3' 14 Q4' 14 Quantity Value Source: Quantec EasyData. Exports quantity experienced an increase of 33% whereas export value increased by 37% during the fourth quarter of 214 when compared to quarter 3 of
4 Million Kilograms Million Rands Figure 4 depict quarterly broiler import quantities and values for the five quarters under review. The import quantity and value of broiler meat fluctuated throughout the period under review and reached their new peak during quarter 2 of 214. Imports (quantity & value) increased by 22% and 27% in volume and value respectively during quarter 4 of 214 compared to quarter 3 in 214 and increased by 17% and 23% respectively as compared to same quarter last year Figure 4: Quartely broiler imports Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Quantity Value Source: Quantec EasyData. 5. GROWTH, VOLATILITY AND STABILITY. Broiler meat industry growth was calculated using the least squares method. Y = b + b1x. Where Y : Values. b : Intercept. b1 : Slope. X : Observations. The volatility and stability measures were determined by calculating the coefficient of variation for the various beef industry statistical series. The formulation for these values is as follows: 4
5 ( xi ) V 1 N 1 where : V Coefficien t of Variation. S tan dard Deviation mean x i obervations in quarter i. N Number of quarters. The outcomes of these growth and volatility calculations are presented in Table 1. They are calculated using quarterly statistics and covered the same five, three months long quarter period under review beginning in October 213 and ending December 214. Table 1: Broiler meat industry growth rates and coefficients of variation from October 213 to December 214 Growth Rate Category Sub-category (%) Coefficient of Variation Production Volume Gross value Value Producer Price Price Exports Volume Value Imports Volume Value Source: Quantec EasyData & SAPA. Table 1 indicates that during the period under analysis the domestic production, gross value, producer price, exports (volume &value) and imports (volume &value) experienced a positive growth of 2.9%, 4.65%, 2.56%, 3.84%,13.95%, 2.85% and 4.13% respectively during the period October 213 to December 214. Table 1 also depicts the levels of volatility/ stability at different levels of the broiler meat industry s quarterly figures over the period (October 213 to December 214). Broiler meat production, gross value, producer price, exports (value & volume) and imports (volume & value) were relatively stable during the period under review with coefficient of variation ranging from.5 and.25. 5
6 6. ACKNOWLEDGEMENTS Acknowledgement is given to the following information sources: a. South African Poultry Association (SAPA) b. Quantec EasyData For more information contact: Director: Marketing Private Bag X 15 Arcadia 7 Tel: (12) Fax: (12) MogalaM@daff.gov.za Website: http// Deputy Director: Commodity Marketing Tel: (12) Fax: (12) ElvisNak@daff.gov.za Senior Agricultural Economist (Livestock) Tel: (12) Fax: (12) DennisN@daff.gov.za Disclaimer: This document and its contents have been compiled by the Directorate: Marketing within the Department of Agriculture, Forestry & Fisheries for the purposes of detailing the broiler meat market. Anyone who uses this information does so at his/her own risk. The views expressed in this document are those of the Department of Agriculture, Forestry & Fisheries with regard to the industry, unless otherwise stated. The Department of Agriculture, Forestry & Fisheries therefore, accepts no liability for losses incurred resulting from the use of this information. 6
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