S. Africa’s poultry sector battles with feed costs and power shortages

Food group Astral’s broiler business has reportedly taken a hit, with approx. 40 mln Rands (€3.3 mln; US$5.2 mln) in direct costs.

Each time there is a power failure Astral loses the entire output at any or all of its three factories, which comes to 10,000 carcasses an hour, AllAfrica reports. This also entails closure of the steam plant for compulsory cleaning before production can resume. Each time this happens, 600-800 workers have to work an overtime shift of 10 hours. To add to this, any time Astral’s retail customers suffer outages, any consignment of fresh chicken already on its way must be dumped.

All that cost R40 mln over the half year to March, and it goes a long way to explain the R48 mln lower operational profit against the R456 mln reported for the first half of 2007.

Economic conditions are not good. Interest rates are soaring and this affects consumer spending. The sharp increase in poultry feed is also depressing the poultry sector, along with other agricultural sectors.