Brace for an expensive Christmas

THE cost of food production, which continues to increase due to global pressures, challenges in energy supply, and the negative effects of climate change will have dire effects on how people will spend their festive season.

Doctor Florence Nherera-Chokuda of the National Emergent Red Meat Producers’ Organisation said all economic indicators showed the country was in recession, so food prices would rise even further.

“This is going to be yet another difficult Christmas. The unit cost of red meat will continue to rise, and both rural and urban dwellers will feel the pinch. It’s time to reflect on the systems that we have for producing and selling food. Rural farmers have to develop their own systems with complete value chains within the context of their communities,” said Nherera-Chokuda.

She said there was a need to adapt in order to reduce the “merry-go-round” systems in which their produce left their systems and was imported after packaging but at exorbitant prices.

“Control your own systems and be self-sufficient on the basics of grains, milk and meat. The current situation calls for change through disruption of known pathways that trap farmers in cycles of poverty,” she said.

Statistics SA recently published the consumer price inflation figures for October 2022, and the figures indicate that annual food prices increased by 0.9% from September to October and by 12.3% on a yearly basis when comparing October 2022 with October 2021.

The figures note that oils and fats (26.1%); bread and cereals (19.4%); meat (10.5%); fish (10.2%); and milk, eggs, and cheese (10.3%) increased substantially between October 2021 and October 2022.

It is, however, important to note that food prices differ from area to area. Rural areas, for example, generally experience higher inflation. “It is also important to remember that the effect of food price inflation is experienced differently by everyone. Households in low-income deciles generally experience the effect of food price inflation more harshly than households in higher income deciles, since the former generally spend a larger proportion of their disposable income on necessities such as food,” reads the report.

An agricultural economist from Agri Western Cape, Daniël Minnaar, said the Pietermaritzburg Economic Justice and Dignity Group also tracks food prices through their Household Affordability Index, and the most significant price increases were for the following:

Onions (10 kg) increased by R9.56, or 8%, between October 2022 and November 2022 to the current price of R125 for 10 kg. Year on year, it increased by R61.69, or 97%.

Other vegetables, such as tomatoes (11%), carrots (46%), spinach (20%), cabbage (17%) and green peppers (32%), also increased on a yearly basis.

Vegetables such as potatoes (-23%) and butternut (-5%) decreased on a yearly basis.

Staples such as maize meal (30kg), cake flour (10kg), and samp (5kg) increased by R54.21 (22%), R30, 62 (32%), and R11.16 (23%), respectively, on a yearly basis.

• Chicken:

Frozen chicken portions (10kg), chicken feet (2kg), and chicken livers (2kg) increased by R31.41 (9%), R10.05 (15%), and R8.24 (14%), respectively, on a yearly basis.

• Beef producer prices:

Weaner’s price decreased and was expected to move sideways over December and January.

The price of A2/A3 slaughter has dropped to R59.74/kg and is expected to rise in the coming weeks before Christmas.

The price of C2/C3 slaughter has risen to R49.11/kg, with further increases expected in the weeks leading up to Christmas.

• Sheep/Lamb:

Feeder lambs: The producer price increased by about 2% last week to R40.96 and is expected to remain at this price for the remainder of the year.

The price of A2/A3 slaughter lamb has risen to R91.99/kg. Slaughter prices might reach a peak around December 16 and decrease after that as demand and purchases for Christmas start to decline after this date.

“C2/C3 slaughter lamb prices decreased to R70.17/kg – slaughter prices may peak around December 16 and then fall as demand and purchases for Christmas begin to decline after this date,” Minnaar said.

He added that chicken prices remain elevated, however, the price is likely to decline after Christmas as demand will subside after that.