Cape Town - Egg producers are warning of possible rising prices as a result of the 18.65% tariff increase Eskom was granted by the National Energy Regulator of South Africa.
“The recently announced Eskom 18.65% tariff increase will add even more pressure to the egg producers, which may result in an increase to the egg prices in the market.
The costs of feed, fuel, and electricity account for about 75% of the total production costs to the farmer, all of these costs are beyond the control of the farmer,” said the South African Poultry Association (Sapa) egg organisation’s general manager, Dr Abongile Balarane.
Balarane said increasingly unreliable and inconveniently timed electricity supply had a severe impact on chickens’ well-being, and added to the cost of packing eggs to the required legislation, either through incurring overtime or buying fuel for generators.
Most egg producers, including large and smaller transformational entrants to the industry, he said, are struggling with these rising costs without obtaining the necessary return on investment.
In terms of the impact on chicken production, Sapa broiler organisation general manager Izaak Breitenbach explained: “The industry slaughters chickens 24 hours a day, so any loss in power impacts that. If load shedding of 6 or 10 hours a week is implemented it causes us to fall behind on slaughter and this ultimately causes a shortage of chicken in the market.
“To catch up, we stop setting eggs in the incubator to prevent more chicks hatching and this gives us time to catch up with slaughter volumes at great cost. In the past 6 weeks, we have reduced the number of birds placed by 10 million birds to catch up on slaughter where we are 10 million birds behind.”
He said contingency plans included diesel generators but this did not address the problem in its entirety.
“We can’t slaughter enough chickens with generators and then the cost becomes prohibitive. On-farm we use of generators and in some instances solar. The biggest contingency for us is to down place chickens at a great cost.”
The Department of Agriculture, Land Reform and Rural Development DALRRD) said following a meeting with leaders of the agriculture sector and food, fibre and beverages value chains over the impacts of load shedding, a task team was created to come up with solutions.
“The meeting of the minister and the sector did receive all the concerns and implications thereof, and that’s why a task team was established which included all stakeholders to look at short, medium and long-term solutions for the whole of the agricultural sector,” DALRRD spokesperson Reggie Ngcobo said.
The small sector task team will include government, industry participants and energy specialists that will continuously monitor the impact of load shedding in the sector and its ability to provide safe and nutritious food to South Africans.
Cape Times