QUARTERLY BEEF MARKET ANALYSIS BULLETIN 1 OF 2015
1. INTRODUCTION
The following discussion is a review of the beef market environment. The analysis is updated on a
quarterly1 basis and the interval covered in the current issue is from October 2013 to December
2014. This period is divided into five, three-month long quarters. The key issues discussed in the
review are trends in production, price, trade, growth and volatility.
2. PRODUCTION TRENDS
Production volumes and gross values for beef during the period under review are presented in
Figure 1 below.
200
180
160
140
120
100
80
60
40
20
0
7 000
6 000
5 000
4 000
3 000
2 000
Million Rands
Million Kilograms
Figure 1: Quarterly beef production and gross value
1 000
Q4 '13
Q1 '14
Q2 '14
Q3 '14
Q4' 14
Production
187
135
157
173
189
Gross value
5 553
4 119
5 298
5 880
6 245
0
Source: Levy Admin and Feedlot Association
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Quarter 1 (January – March); Quarter 2 (April – June); Quarter 3 (July – September); Quarter 4 (October – December)
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The period under review kicked in with both improved volumes and values of beef. Beef production
fluctuated from quarter 4 of 2013 to quarter 2 of 2014 and then maintained growth in quarter 3 of
2014 to quarter 4 of 2014. The highest production and value of beef was recorded in Q4 of 2014 at
189 million kilograms and R 6 244 979 988 respectively. The lowest production volume and value
were recorded in Q1 of 2014 at 135 million kilograms and R 4 118 597 481 respectively. Beef
production and its gross value experienced an increase of 1% and 12% respectively during quarter
4 of 2014 compared to quarter 4 of 2013 and increased by 10% and 6% respectively compared to
quarter 3 of 2014. Substantial growth in production of beef during Q3 and Q4 of 2014 can be
attributed to good producer price and improved grazing pastures as a result of the summer season
which comes with rain.
3. PRICE TREND OF BEEF
Figure 2 below illustrates the quarterly prices of beef and weaners.
Figure 2: Beef producer prices
40
35
Rands/Kg
30
25
20
15
10
5
Q4 '13
Q1 '14
Q2 '14
Q3 '14
Q4 '14
Beef price
29.66
30.62
33.60
34.05
32.96
Weaner Price
16.63
17.09
17.56
18.64
20.92
Source: Feedlot Association
Beef fetched an average producer price of R32.96 per kg while weaner fetched R20 92 per kg during
the quarter four of 2014. There was a decline in price of beef and an increase in price of weaners
during quarter 4 2014. Growth in the price of weaners was appreciable. As indicated on the graph
above, beef and weaner prices moved at an increasing trend during the period under review except
in quarter 4 where beef price dropped. They both followed the same trend with beef prices above
weaners’ prices. Beef received highest producer price of R34.05/Kg during quarter 3 of 2014 and
weaners received highest price of R20.92/Kg during quarter 4 2014. An impressive growth in beef
and weaner prices was observed during Q4 2014 with an increase of R 3.30/Kg (11%) and R
4.29/Kg (26%) respectively compared to quarter 4 in 2013. Beef prices are expected to trend
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sideways to firmer in the short term but will soften in the medium term due to increased seasonal
supplies.
4. EXPORTS AND IMPORTS
Volumes and gross values of beef exports during the five quarters under review are depicted in
Figure 3 below.
8 000
350 000
7 000
300 000
6 000
250 000
5 000
200 000
4 000
150 000
3 000
100 000
2 000
50 000
1 000
0
Quantity
Value
Thousand Rands
Thousand Kilograms
Figure 3: Beef exports quantities
Q4 '13
Q1 '14
Q2 '14
Q3 '14
Q4 '14
3 334
3 032
3 385
4 441
7 187
167 335
147 600
164 299
219 350
326 856
0
Source: Quantec Easy Data
During the fourth quarter of 2014, South Africa exported 7 187 million kilograms of beef worth the
value of R 327 million. Beef exports (quantity & value) were high during quarter 4 of 2013, declined
slightly during quarter 1 of 2014 and then continued to increase until quarter 4 of 2014. Figure 3
shows a significant increase of exports during quarter 4 of 2014 as compared to the same quarter
last year. There was an exponential increase of 116% in quantity and 95% in value exported during
quarter 4 of 2014 as compared to quarter 4 of 2013. An upward movement of exports was
expected during quarter Q4 of 2014 since South Africa gained its free Foot and Mouth Disease
(FMD) status as from 14 February 2014.
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Volumes and quantities of beef imported by South Africa during the period under review are
presented in Figure 4 below.
1 600
40 000
1 400
35 000
1 200
30 000
1 000
25 000
800
20 000
600
15 000
400
10 000
200
5 000
0
Q4 '13
Q1 '14
Q2 '14
Q3 '14
Q4 '14
Quantity
1 354
888
847
507
262
Value
35 374
27 108
23 188
12 123
7 789
Thousand Rands
Thousand Kilograms
Figure 4: Quartely beef imports
0
Source: Quantec EasyData
The import quantity and value of imports of beef decreased throughout the period under review
with the lowest value experienced in quarter 4 of 2014 and the highest value experienced in
quarter 4 of 2013. The high imports (quantity & value) experienced during quarter 4 of 2013 might
be due to the increased local demand as result of festive season.
Imports quantity and value experienced a drastic decrease of 416% and 354% respectively in
quarter 4 of 2014 compared to the same period in 2013 and experienced a decrease of 48% for
quantity imported and 36% of value of imported beef when compared to quarter 3 of 2014.
5. GROWTH, VOLATILITY AND STABILITY.
Beef industry growth was calculated using the least squares method by estimating the following
equation:
Y = b0 + b1X
Where Y
b0
: Values.
: Intercept.
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b1
X
: Slope.
: Observations.
The volatility and stability measures were determined by calculating the coefficient of variation for
the various beef industry statistical series. The formulation for these values is as follows:
  ( xi   )




N


V   100 
   100






where : V  Coefficien t of Variation .
  S tan dard Deviation
  mean
xi  obervations in quarter i.
N  Number of quarters.
The outcomes of these growth and volatility calculations are presented in Table 1. They are
calculated using quarterly statistics and divided into five, three-month long quarters beginning in
October 2013 and ending December 2014.
Table1: Beef industry growth rates and coefficients of variation from October 2013 to
December 2014.
Growth Rate
Coefficient of
Category
Sub-category (%)
Variation 2
Production
Volume
2.27
0.14
Gross Value
Value
5.91
0.15
Producer Beef Prices
Price
3.17
0.06
Producer Weaners’ Prices (200- Price
5.46
0.09
240 kg)
Exports
Volume
19.17
0.40
Value
17.35
0.36
Imports
Volume
-38.47
0.54
Value
-38.31
0.53
Source: Calculated from Feedlot Association, Levy Admin & Quantec EasyData.
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Calculations are based on average values
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Table 1 indicates that domestic production, gross value, beef and weaners’ producer prices and
beef exports (volume & value) experienced a positive growth rate of 2.74%, 5.91%, 3.17%, 5.46%,
19.17% and 17.35% respectively except imports volume and value which experienced negative
growth of -38.47 and -38.31% respectively during the period under review. Table 1 also depicts the
levels of volatility/ stability at different levels of the beef industry’s quarterly figures over the same
period (October 2013 to December 2014). All variables were less volatile during the period under
review ranging between the coefficient variation of 0.06 and 0.54.
6. ACKNOWLEDGEMENTS.
Acknowledgement is given to the following information sources:
a) Red Meat Levy Administration (RMLA)
www.levyadmin.co.za
b) SA Feedlot Association (SAFA)
www.safeedlot.co.za
c) Quantec Easy data.
www.quantec.co.za
For more information contact:
Director: Marketing
Deputy Director:
Senior
Agricultural
Private Bag X 15
Commodity Marketing
Economist (Livestock)
Arcadia 0007
Tel: (012) 319 8072
Tel: (012) 319 8106
Tel: (012) 319 8455
Fax: (012) 319 8077
Fax: (012) 319 8077
Fax: (012) 319 8131
E-mail:
E-mail:
E-mail: [email protected]
[email protected]
[email protected]
Website: http//www.daff.gov.za.
___________________________
Disclaimer: This document and its contents have been compiled by the Directorate: Marketing
within the Department of Agriculture, Forestry & Fisheries for the purposes of detailing the beef
market. Anyone who uses this information does so at his/her own risk. The views expressed in this
document are those of the Department of Agriculture, Forestry & Fisheries with regard to the
industry, unless otherwise stated. The Department of Agriculture, Forestry & Fisheries therefore,
accepts no liability for losses incurred resulting from the use of this information.
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