Post on 28-Dec-2015
BFAPAgricultural
OutlookCattlemans Conference 2015
Ferdi Meyer & Tracy Davids
How important is red meat?
0 1 2 3 4 5 6 7 8 9 10 11
-100
-80
-60
-40
-20
0
20
40
60
80
100
2005
Share of food expenditure (%)
Ne
t tr
ad
e/S
A c
on
su
mp
tio
n (
%)
0 1 2 3 4 5 6 7 8 9 10 11
-100
-80
-60
-40
-20
0
20
40
60
80
100
2010
Share of food expenditure (%)
3
2030: An optimistic view?
Inputs?
Markets?
Profitability?
BFAP: Your partner in decision-making
1990 1995 2000 2005 2010 2015 2020 20250
5000
10000
15000
20000
25000
30000
35000
40000
Real Net Farm Income
?
The pendulum
Due to biological nature of production, the pendulum
effect is by far the biggest in agriculture
SOME WE CAN MEASURE ……..SOME
WE CAN’T
Overview: Domestic Drivers
• Slowing population growth rate• Continued positive but sluggish income growth• Depreciation of the Rand against the U.S.D
Driver: Population
20052006
20072008
20092010
20112012
20132014
20152016
20172018
20192020
20212022
202345
46
47
48
49
50
51
52
53
54
55
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
SA population % Growth
Mill
ions
% g
row
th
• Youth bulge population (StatsSA Census 2011 in brief)
Dynamics in the SA consumer environment:
AGE DISTRIBUTION
Overview: Real GDP per Capita
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 20240
5,000
10,000
15,000
20,000
25,000
30,000Real GDP per Capita
Baseline 2012 Baseline 2013 Baseline 2014
Dynamics in the SA consumer environment:
CLASS MOBILITY
LSM 1 LSM 2 LSM 3 LSM 4 LSM 5 LSM 6 LSM 7 LSM 8 LSM 9 LSM 100
5
10
15
20
25
2004 2008/9 2013
% o
f S
A a
du
lt p
op
ula
tio
n
+25%
+69%
+99%
+82%
+68%
+22%
-85%
-21%-59%
-72%
Exchange rate forecasts
2000 2005 2010 2015 20200
200
400
600
800
1000
1200
1400
1600
Baseline 2012 Baseline 2013 Baseline 2014 Baseline 2015
…..international markets
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20142015
20162017
20182019
20202021
20222023
20240
5000
10000
15000
20000
25000
30000
35000
40000
USA Australia Argentina Europe
Thou
sand
Hea
d
Source: OECD-FAO
Livestock numbers - Beef
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42009 2010 2011 2012 2013 2014
58,000
60,000
62,000
64,000
66,000
68,000
70,000
US Pig inventory
Source: USDA
Livestock numbers - Pigs
Livestock price outlook
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20142015
20162017
20182019
20202021
20222023
20240
1000
2000
3000
4000
5000
6000
7000
Poultry: Brazil average producer priceUS Choice steers, 1100-1300 lb dressed weight, Nebraska.US Barrows and gilts, No. 1-3, 230-250 lb dressed weight, Iowa/South Minnesota
US
Dol
lars
per
ton
(CW
E)
Source: OECD-FAO
Maize price outlook
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20142015
20162017
20182019
20202021
20222023
20240
50
100
150
200
250
300
Yellow maize, US No.2, fob, Gulf
US
Dol
lar p
er to
n
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20142015
20162017
20182019
20202021
20222023
20240
5
10
15
20
25
30
35
US Beef-Maize Price Ratio RSA Beef-Maize Price Ratio
Feedlot dynamics – RSA vs. USA
Meat consumption Outlook
Beef Poultry Pork Sheep0
20000
40000
60000
80000
100000
120000
140000
160000
2001-2003 2011-2013 2023
Source: OECD-FAO
14%
China - more uncertainties
• IHS Global Insight have Chinese real GDP growing at 7% on average over the next 10 years
• From $7.5 trillion to $14.9 trillion in 2010 dollars• Say that was 8% instead, would add an additional
$260 billion• Equivalent of an Ireland or Algeria
…..what does all of this mean for our market??
Meat Consumption Growth
Beef Chicken Sheep meat Pork Eggs0
250
500
750
1000
1250
1500
1750
2000
2250
2500
2750
3000
Consumption: Avg 2001-2003 Consumption: Avg 2011-2013 Consumption: 2023
Thou
sand
tons
34%
20%
15%41%
27%
12%
81%
33%
53%-17%
January
February
March AprilMay
JuneJuly
August
September
October
November
December
300000
350000
400000
450000
500000
550000
2009 2010 2011 2012 2013 2014
Feedlot standing stock
January
February
March AprilMay
JuneJuly
August
September
October
November
December
0
50000
100000
150000
200000
250000
300000
Cattle Slaughters 2012 Cattle Slaughters 2013 Cattle Slaughters 2014
Cattle slaughters
Meat Prices (R/kg)
20022004
20062008
20102012
20142016
20182020
20220.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Beef average auction price
Chicken total realisation (Whole frozen)
Lamb avg auction price
Pork avg auction price
2002 2004
2006 2008
2010 2012
2014 2016
2018 2020
2022 0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Beef average auction price
Chicken total realisation (Whole Frozen)
Lamb avg auction price
Pork avg auction price
Nominal Real
Feedlot economics
2002 2003
2004 2005
2006 2007
2008 2009
2010 2011
2012 2013
2014 2015
2016 2017
2018 2019
2020 2021
2022 0
1000
2000
3000
4000
5000
6000
0
2
4
6
8
10
12
14
16
Beef average auction price Calf average auction price Calf:beef price ratio (right axis)
c/kg
Pric
e Ra
tio
Maize and parity
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
1000
2000
3000
4000
5000
6000
0
500
White maize
White maize imports White maize exports Import parity Randfontein SAFEXExport parity africa
R/t
on
Th
ou
sa
nd
to
ns
1994 1999 2004 2009 2014 20190.0
500.0
1000.0
1500.0
2000.0
2500.0
White Maize Yellow Maize Wheat Summer Wheat Winter Sunflower Soybeans Canola Bareley
SA field crops area
Canola
Sunflower
Wheat WinterWheat Summer
Soybeans
White Maize
Yellow Maize
Barley
Soybeans and parity
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
-400
-200
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
Production Domestic use Net imports Import parity - Randfontein SAFEX
Export parity - deep sea
R/t
on
Th
ou
sa
nd
to
ns
Soybean processing
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
0
200
400
600
800
1000
1200
1400
1600
1800
2000Soya bean cake
Production Domestic use Net imports Price
R/to
n
Thou
sand
tons
…..and in the long run??
Africa Total
Ang. Bots. Mal. Moz. SA Tanz. Zam. Zim.
High 161 783 65 895 0 3 445 30 858 136 29 645 28 805 2 135 Med 82 179 18 878 163 2 398 15 355 6 757 17 587 8 880 13 433 Low 54 293 8 463 4 868 823 7 088 7 685 12 420 318 12 628 Total Arable 298 250 93 235 5 030 6 665 53 300 14 578 59 653 39 003 28 195 H/ Total arable
54% 40% - 2% 19% 0.001% 18% 17% 1%
SADC Regional Potential
Africa – Growing Investment
BARD - Expanding into Africa
ZambiaRSA
MalawiTanzania
MozambiqueKenyaDRC
BotswanaZimbabweNamibiaAngolaUgandaRwanda
End!
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