Experts Warn of Imminent Chicken Price Hike as Major Producer Faces Profit Decline
South African consumers might soon face higher chicken prices as the country’s largest poultry producer, Astral, warns of weak financial results for the first half of 2025. Industry experts attribute this to increased production costs, falling chicken prices, and significant economic challenges, signalling a potential rise in chicken prices nationwide.
The Reason Behind the Predicted Price Hike:
Astral has revealed that it anticipates reporting poor results for the six months ending 31 March 2025. The company attributes this to a combination of factors, including declining chicken prices, higher feed costs, and increased production expenses.
In its recent trading statement, Astral predicted a decline in earnings per share (EPS) by 55% to 45% compared to the same period in 2024. The company also expects its headline earnings per share (HEPS) to fall by 60% to 50%, reflecting a significant downturn in its core earnings.
Key Factors Impacting Chicken Prices:
- Economic Pressures and Load Shedding:
The challenges faced by Astral can be traced back to 2023 when load shedding and a bird flu outbreak disrupted production. Although the company showed signs of recovery in 2024, achieving strong financial results, the economic strain persisted, primarily due to fluctuating maize prices and increasing poultry feed costs. - Price Deflation and Consumer Environment:
Astral has cited price deflation in chicken sales as a major factor squeezing its profit margins. Retail promotions on frozen chicken, combined with a constrained consumer environment, have placed pressure on selling prices, exacerbating the situation. - Feed Costs and Drought Impact:
An ongoing drought in 2024 led to a rise in local maize prices, increasing feed costs substantially. As feed represents a major portion of poultry production costs, this has had a direct impact on profitability. - Cybersecurity Issues:
Earlier this year, Astral faced a cybersecurity breach, leading to a loss of R20 million in profits. Although the incident did not compromise sensitive data, it caused processing delays and disruptions in customer deliveries, further affecting revenue.
What Consumers Can Expect:
If Astral’s predictions materialize, South Africans may see a noticeable increase in chicken prices. The company has emphasized the need to recoup losses, potentially leading to price adjustments on chicken products across retail stores.
Although the audited results are not expected until 19 May 2025, the current forecast already raises concerns about affordability for many consumers. The poultry industry is likely to navigate this complex economic environment by balancing production efficiency and cost management to mitigate further price hikes.
As South Africa’s poultry giant braces for financial strain, consumers should prepare for potential chicken price increases. Economic challenges, rising feed costs, and market volatility are all contributing factors that could soon affect the retail prices of this staple protein. Stay tuned for the official financial reports from Astral, which will shed more light on the extent of the impact.
Also read: SASSA Grants vs VAT-Free Chicken: Which Offers More Relief for Struggling South Africans?
