• Market Watch

Crisis point: SA red meat industry risks R10.6 billion loss

• 11 Hours Ago

South Africa’s red meat sector stands at a perilous crossroads, facing a potential Gross Production Value (GPV) loss of R10.6 billion over the next five years if it fails to tackle the persistent twin threats of animal disease and relentless input cost inflation.

The Trajectories of South Africa's Red Meat Industry report, released in August 2025 and compiled by the South African Bureau for Food and Agricultural Policy (BFAP) on behalf of Red Meat Industry Services (RMIS), paints a stark picture of an industry stalled by internal and external pressures, struggling to achieve its ambitious Strategy 2030 goals. Its core finding is that ongoing challenges must be met with immediate, strategic investment in animal health and market access to unlock a path towards resilient, profitable growth.



The vicious squeeze

The industry has been buffeted by a decade of volatility, including global shocks, drought and recurrent outbreaks of Foot and Mouth Disease (FMD), which remain a primary barrier to securing and maintaining access to high-value international markets.

Producers are caught in a severe cost–price squeeze, with the cost of essential inputs far outpacing any price gains. Between 2019 and 2024, production costs surged: Electricity rose at an average annual rate of 12%, fertiliser at 13%, and fuel at 11%. In stark contrast, domestic average retail prices for beef and lamb increased more slowly, at 4.6% and 2.9% respectively, leaving industry profitability under strain along the entire value chain.

Exacerbating the situation is a shrinking domestic consumer market. Real disposable incomes per capita decreased at an annual rate of 0.08% between 2015 and 2024, leading to a significant shift towards more affordable proteins. From 2015 to 2024, per-capita consumption of sheep meat plummeted by an annual average of 6% (to 1.5 kg), and beef dipped by 1.5% (to 12.2 kg). Conversely, per-capita pork consumption surged by an average of 3.2% annually, highlighting the affordability challenge facing red meat.



The two futures

The BFAP report models two potential future trajectories for the sector:

Status quo scenario: If the industry continues with inadequate national animal health systems, recurring FMD outbreaks, and limited export access, it will struggle to meet Strategy 2030 targets. Under these conditions, annual beef exports are projected to stagnate at around 4 000 tons, resulting in a projected R10.6 billion loss in GPV over the next five years.

Strategic investment scenario: This path requires proactive, co-ordinated disease control, greater diversification into value-added export cuts, and expanded market access. While this scenario demonstrates enhanced resilience and profitability potential, it is still projected to yield a GPV of R56.8 billion by 2030, leaving the industry R14.7 billion short of its aspirational R71.5 billion Strategy 2030 target, largely due to production losses during recent difficult farming seasons and the FMD crises.



Engine of growth

With domestic demand constrained, the report identifies export markets as the critical engine for future growth. Global beef consumption is projected to grow by 1.2% annually, with Asia alone expected to account for the bulk of this increase, adding 5.1 million tons of consumption between 2025 and 2034.

To tap into this high-value opportunity, South Africa must emulate global leaders such as Australia in maximising value from the entire carcass, particularly the “fifth quarter” (offal and non-meat by-products). The fifth quarter can comprise around 45% of an animal’s live weight, yet South Africa currently exports offal at an average unit value of US$3.50 per kg, with only 8 700 tons exported in 2024.

In contrast, Australia - renowned for high meat safety and quality standards - exported 220 000 tons of offal at an average unit value of US$5.05 per kg, commanding premium prices (e.g. up to AUS$13.68/kg for Halal tongue) from markets such as Japan and the United States.



Recalibration and co-ordinated action

Achieving the Strategy 2030 goal requires a steep 7% GPV annual growth rate - more than double the currently projected 3% baseline growth. The industry’s path to success depends on a “recalibrated strategy” involving targeted, high-impact, cross-cutting interventions that go beyond business as usual.

The report’s key cross-cutting recommendations for driving this required growth trajectory include:

• Implementing an industry disease control plan: Building resilience through co-ordinated veterinary systems, rapid-response teams, and the development of “FMD-Free with Vaccination” zones.

• National livestock identification and traceability: Introducing mandatory, tech-driven systems to guarantee origin, contain outbreaks, and build trust with global partners.

• Export market strategy and implementation: Developing a unified export strategy to diversify markets and focus on high-value cuts (carcass-value optimisation) to boost slaughter volume and revenue.

Without strategic alignment and joint action among all stakeholders, the BFAP report concludes, the red meat sector faces a vulnerable and uncertain future. The ability to translate these findings into co-ordinated, actionable measures will define the industry’s capacity to evolve into a resilient, globally competitive exporter.



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