Chicken is an essential part of South African culture and economy.
The country has seen a 20% increase in the cost of chicken, with higher prices on the way.
More than half of South African adults live below the poverty line.
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CAPE TOWN, South Africa – Food insecurity is nothing new for South Africans, and soaring prices for staple ingredients like chicken will make it even more difficult to access staple foods.
Chicken is an essential part of South African culture and economy. A Google search beginning with “nearest…” often automatically comes up with choices such as “KFC”, “Nandos” or “Chicken Licken”.
Not only are there nearly 1,000 KFC locations in the country, but South Africans use the whole bird for cooking, including the heads and feet, known as “walkie-talkies” and “runaways”. Chicken is the biggest source of protein in this country of 60.1 million people.
Average per capita chicken consumption in South Africa in 2020 was nearly 39 kilograms per year, more than double beef consumption of 16 kilograms per year and more than four times egg consumption of 9 kilograms per year. year, according to the South African report. Poultry Association.
In early July, the price of a whole frozen chicken rose 20% year-on-year to R33.65, or around $1.96, according to a study by Absa banking group “Agri Trends: Livestock Report”.
And poultry prices will continue to climb, according to the report.
“We expect chicken prices to trend higher over the coming weeks, supported by a weaker exchange rate, high input costs and firm consumer demand for affordable sources of protein. of meat,” the report said.
In a country where more than half of adults live below the national poverty line and 27% of the country’s children are stunted, according to UNICEF, a 20% increase in the cost of a staple food like chicken means fewer people can afford an important source of protein. Rising prices are stressful for consumers, poultry farmers and small fast food outlets.
Aamir Shahzad, the owner of Aysha’s Take Aways in Lotus River, Cape Town, said over the past year he had seen the price of his main ingredients rise significantly, citing the cost of staple foods like butter, which went from R12 to R22. ; the price of 1 kilogram of chili powder has increased from R35 to R90; and the price of chicken almost doubled from R24 to R45 per kilogram.
Shahzad is feeling the pressure – he said he had very little room to raise prices, and since doing so earlier this year sales have been falling. He had to lay off four of his five employees and his small business suffered a loss of 22,000 rand, or about $1,940, in June.
“There’s not a lot of money,” he said.
Everything costs more in this impoverished economy
Economic hardship is hitting South African residents from many angles, including rising fuel and electricity prices and rising interest rates.
South Africa already faces steep inequalities in access to goods and services, and the COVID-19 pandemic has widened the gap. And this has led to a sharp increase in unemployment, from 27.6% in the first quarter of 2019 to 34.5% in the first quarter of 2022.
“Rising chicken prices don’t tell the whole picture, because the situation of South Africa’s poor is much worse than this indicator,” said Mervyn Abrahams, program coordinator at the Pietermaritzburg Economic Justice and Dignity Group, an organization that monitors the cost of food prices for the poor in South Africa.
The PEJDG tracks a basic grocery basket, containing 44 essential foods, in its Household Affordability Index, and it found that in June the cost of a basic nutritional food basket increased by 11 .5% year-on-year to R3,187 for a family of four.
Abrahams said about half of the country’s workers earn 3,500 rand, or $211.65, a month, the country’s basic minimum wage.
“This basket has become completely unaffordable. We have terrible problems,” Abrahams said.
The South African economy was struggling even before the arrival of COVID-19. It entered recession in the second half of 2019, and the pandemic caused the economy to shrink even further, with GDP contracting by 5% at the end of 2020.
Throughout 2021, the economy has been recovering steadily, reaching pre-pandemic levels in the first quarter of 2022. Growth has come to a halt, however, with the ongoing war in Ukraine, which has put tremendous pressure on an already tight food supply. .
Even as food prices rise, experts say the grocery bill isn’t even the top spending priority for the nation’s poor.
“People prioritize transportation costs, electricity and debt service. Only then do people start buying food,” Abrahams said.
The cost of feeding a family
All of this means that chicken, which is a mainstay in many homes and businesses, is becoming less affordable, although still cheaper than red meat and other protein options.
And it is becoming increasingly difficult for chicken farmers and producers to support themselves, given the rising costs of growing, feeding and selling the bird.
“It puts a lot of pressure on smallholders,” said Joandra Cloete, manager of Our Poultry Place Farm, a broiler farm outside Cape Town that also offers mentorship and sells feed and other produce. poultry to other small farmers.
Difficult times force farmers to make desperate choices.
“Sometimes this even forces small producers to abandon their plans. Others try to mix their own feed, but it just results in huge loss of life for their chickens,” Cloete said. Although mixing or buying less feed may seem like a cost saver, it can lead to slow chicken growth and other health issues.
Cloete said it was inevitable that Our Poultry Place Farm would have to raise prices.
“We had no choice when it came to passing on prices, otherwise we will have to close our farms, leaving many people out of work and children and households suffering,” she said.
Although the sharp rise in food prices is putting pressure on poor households, they receive government allowances, which started at the height of COVID-19.
The government has been providing a monthly subsidy of R350 to 10.5 million people since March 2020, to mitigate rising food costs.
“It seems that R350 is mostly for chicken,” said Chris Shutter, CEO of Astral Foods, South Africa’s largest chicken producer.
Although subsidies have helped in the short term, South Africans are now grappling with further price hikes, with food and non-alcoholic beverages up 7.6% year-on-year in June, against 6.2% in March, before the start of the war in Ukraine.
Cheaper cuts and odd tips
Shahzad, the owner of Aysha’s Take Aways, said he knows of several fast food chicken shops that are up for sale because the owners are struggling to make a living running the establishments. In his five years of running his business, this is the worst drop in sales he has seen.
From what Abrahams of the PEJDG has seen, people aren’t giving up chicken altogether, but are turning to eating the less desirable parts of chicken like the gizzard, liver and legs.
This change increased demand so much that it caused a noticeable spike for some of these coins. The price of 2 kilograms of chicken liver, for example, rose 24% year-on-year to around R68 in June.
Abrahams said global supply chain issues have made an already difficult situation worse.
According to PEJDG, a 10-kilogram bag of frozen chicken pieces was up 14% year-on-year, to R384 in June.
The National Agricultural Marketing Council raised this concern in its March 2022 issue of the South African Poultry Products Prices Monitor.
“South Africa’s current economic challenges are likely to exacerbate consumers’ inability to afford poultry, which is one of the most affordable and consumed sources of animal protein by the majority of households in the country. country,” the council said.
For her part, Cloete of Our Poultry Place Farm sees no easy way for South Africans to circumvent soaring food prices.
“I guess consumers just have to roll with the punches and moms have to try to feed their families on tighter budgets,” she said.
Read the original article on Business Insider