Poultry producers benefit as soybean and maize prices drop, but farmers face challenges
Agricultural Business Chamber of South Africa said that a recent 12% drop in the soybean spot price compared to a year ago may not be good news for the grain farmer but signals good news for feed prices and the poultry sector.
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A sharp decline in soybean and maize prices is creating mixed outcomes in South Africa’s agricultural sector, lowering feed costs for poultry producers but squeezing margins for grain farmers.
According to the Agricultural Business Chamber (Agbiz), soybean spot prices have dropped by around 12% compared to a year ago, while white maize prices have plunged by as much as 39% year-on-year.
Yellow maize prices are also under pressure, down roughly 28% over the same period.
Agbiz chief economist Wandile Sihlobo said the price decline comes amid a period of strong agricultural activity.
“In the northern regions of our country, farmers are beginning to harvest soybeans and other summer grains and oilseeds,” he said.
Since the start of the current marketing season in March, farmers have delivered over 245 000 tons of soybeans to commercial silos.
Despite a projected harvest of 2.7 million tons — about 4% lower than last year due to weaker yields in some regions — output remains well above the long-term average.
Sihlobo noted that this level of production will likely keep South Africa in a net export position, while simultaneously placing downward pressure on domestic prices.
“A harvest of 2.7 million tons is well above the long-term average and will keep South Africa in a net exporting position,” he said.
While lower prices are unwelcome news for soybean producers, they are providing a significant boost to the livestock and poultry industries, where feed costs make up the bulk of production expenses accounts for over half of input costs in yellow and soybeans.
Sihlobo said yellow maize prices are also under pressure, down 28% from a year ago, due to ample supplies.
“So, we are at a time of favourable feed prices for the poultry producers.”
Izaak Breitenbach, CEO of the South African Poultry Association, said soybean meal is a critical component in broiler diets, accounting for about 23% of feed composition but roughly half of feed costs per ton.
“The soybean price is thus very important in final feed price determination,” Breitenbach said.
He added that the drop in maize and soybean spot prices is good news for feed prices.
“Good news for sure, it will put the industry in a position to supply affordable chicken meat to our consumers as we have done for many years.”