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Feed, Fertiliser, And Import Competition Push Agri Prices Higher

21 May 2021 – The rising cost of fertiliser and feed, steep increases in the price of maize – in addition to bird flu pressure – were weighing on the poultry industry and could add as much as R2 per kilogram to the price of chicken, producer Astral Foods said yesterday during its latest financial results announcement.

According to a report seen by Freight News, the group said that the high price of feed had impacted the price of chicken to the extent that Astral had been forced to subsidise cost increases.

Astral CEO Chris Schutte said they had had to absorb spiralling costs for more than a year, but could not do so any longer.

A primary cause of increased costs is said to be the price of maize which has gone up to R3 400 per ton from R2 700 for the same period a year ago.

Astral added that chicken imports, totalling about 39 704 tons per month and made up of some 40 000 different poultry products from countries like Brazil, were posing a significant challenge to local producers.

Astral also said its operating profit had decreased substantially – by 78.6% to R61 million.

Stiff operating cost increases elsewhere in the agricultural sector, namely in the potato industry, were also recently cited as having contributed to steep rises in the staple’s per-packet price.

A farmer from Mpumalanga said fertiliser imported into South Africa had not only been delayed because of coronavirus disruption affecting the chain of supply, but that it had added to operational costs.

Parts for machinery were also scarcer, adding as much as two weeks to the waiting time for an item to reach an agricultural hub like Middelberg where it used to take two to three days.

The cost of transporting temporary workers around during harvesting season further added to price increases as social distancing required two trips to ferry people back and forth whereas one trip used to do. Source (FreightNews)