Abstract

This brief aims to provide insights into the nexus between the prices of yellow maize, soybean and poultry products. Yellow maize and soybean are to a great extent imported into the country. Thus, any external shocks such exchange rate volatility, supply chain disruptions and climate volatility play a critically influence the prices of these imports. Our trend analysis reveals that as prices of yellow maize and soybean rise, the cost of poultry production hikes, culminating into prices of the various poultry products also to rise but in varying proportions, largely driven by soybean. The rising feed costs not only erode the profitability of poultry production but also threaten food security, especially for low-income households which rely on poultry as an affordable protein source. Thus, interventions aimed at stabilizing feed prices need to be prioritised to reduce reliance of imported soybean and sunflower which is also used in the feed industry. For instance, there is a need to further support the domestic production of soybean and sunflower from which oilcakes are extracted to enrich the yellow maize during feed formulation. Moreover, there is an opportunity to explore the use of insects as sources of protein in feed rations.

Introduction

The fluctuations in maize and soybean prices significantly impact poultry production and market prices, primarily due to their role as essential feed components. According to Hussein (2017), feed costs account for approximately 70% of poultry production expenses. Therefore, any price increase on these raw materials used in poultry feed can lead to reduced profit margins for producers, ultimately affecting producer and retail prices of poultry products. Poultry is one of the most affordable sources of proteins and plays a crucial role in addressing food security, particularly for low-income households in South Africa. The poultry industry plays a significant role in South Africa’s agricultural economy. According to South African Poultry Association (SAPA) (2025), the poultry industry accounts for 13% of total employment in the agricultural sector, of which black farmers contribute 1638 jobs. However, market stability in the poultry sector remains closely tied to input costs, especially feed prices.

Maize and soybean are critical in poultry diets, with maize comprising about 60% of the feed (Hussein, 2017), providing the energy and protein required for optimal growth and production. Notably, sunflower is also a commonly used source of protein in animal feeds but in this advisory note, much focus is drawn to soybean. The prices of these inputs are prone to volatility, driven by factors such as climatic conditions, geopolitical disruptions, and global market trends. For example, in Nigeria, rising maize and soybean meal prices negatively impacted egg production, resulting in increased egg prices (Afodu et al., 2024). This demonstrates the interdependence between maize prices and poultry production, whereby shocks in poultry markets have a more pronounced effect on maize demand and vice versa (Marsh, 2007). Similarly, in Brazil, the synchronization of maize and soybean prices with chicken prices highlights how fluctuations in these inputs directly affect poultry market dynamics (Santana et al., 2020).

Moreover, the problem is compounded by South Africa’s dependence on imports of soybean to meet local demand. Global supply chain disruptions, such as those experienced during the COVID-19 pandemic and geopolitical tensions, have amplified the volatility of feed prices (Mthembu et al., 2022). This has left local producers exposed to unpredictable market conditions and unable to fully capitalize on potential export opportunities for poultry products. Without policy interventions to stabilize feed prices or promote local production of key feed ingredients, the ripple effects on the poultry market threaten not only producer profitability but also consumer affordability and overall, the country’s food security status.

Agricultural production by gross value and volume

Figure 1 shows the gross value of production (GVP) for agriculture from 2010/11 to 2023/24. The agricultural GVP amounted to R448.4 billion between July 2023 and June 2024 (2023/24 split year). Comparing with 2010/11 and 2022/23, the GVP increased by 211.7% and 5.3%, respectively. The three sub-sector that contribute to the agricultural GVP are the field crop sub sector, the horticulture sub sector and the animal products sub sector. These sub sectors contributed 26.5%, 30.3% and 43.2%, respectively to the total during 2023/24.

Figure 1: Agricultural gross value production

Source: DALRRD, 2024

Figure 2 shows the GVP for maize, soybeans and poultry meat from 2010/11 to 2023/24. The poultry meat industry contributed 35.5% to the animal product sub sector during the 2023/24 split year, equivalent to R68.8 billion, which is 172.2% higher than contribution realised during the 2010/11 period and 10.0% higher than the 2022/23 period.

Not only is maize and soybeans important as poultry feed, these items are also contributed significantly to the field crop sub sector GVP during the 2023/24 period by 48.6% and 12.5%, respectively. The soybean industry grew with a substantial 727.7% from R1.8 billion in 2010/11 to R14.9 billion in 2023/24. The maize industry amounted to R57.7 billion in 2023/24, which is 245.2% higher than what was achieved in 2010/11 and 1.6% higher than the GVP of 2022/23.

Figure 2: Gross value of production of maize, soybeans and poultry meat

Source: DALRRD, 2024

Poultry Market price trends

Figure 3 illustrates the average monthly retail prices for selected chicken products from October 2017 to October 2024. Over this period, the prices for individual quick frozen (IQF) chicken portions (2kg), fresh chicken portions (1kg), whole chicken, non-IQF frozen chicken portions (1kg), and chicken giblets (1kg) increased by 49.2%, 45.8%, 44.8%, 42.8%, and 14.4%, respectively, reflecting a consistent upward trend in most poultry products. Comparing prices annually between October 2023 and October 2024, the retail prices of poultry products continued to rise, with whole chicken, non-IQF frozen chicken portions (1kg), fresh chicken portions (1kg), and IQF chicken portions (2kg) increasing by 5.0%, 4.1%, 3.9%, and 3.6%, respectively. However, chicken giblets experienced a slight decline of 0.8% during the same period.

On a month-to-month basis, the upward trend persisted, with prices for non-IQF frozen chicken portions (1kg), fresh chicken portions (1kg), and IQF chicken portions (2kg) increasing by 1.4%, 0.7%, and 0.4%, respectively. In contrast, prices for whole chicken and chicken giblets decreased slightly. These price movements align with global trends, where the FAO Poultry Meat Price Index showed a decline in September 2024, influenced by rising international poultry meat prices driven by strong import demand for Brazilian poultry meat. This demand was spurred by the easing of trade restrictions related to Newcastle disease (FAO, 2024).

Similar trends were observed in October 2021 and October 2022, where rising global poultry prices were attributed to higher shipments to markets such as Mexico, Cuba, and Angola (NAMC, 2021; NAMC, 2022). In 2021, increased global poultry meat prices were further driven by high demand, rising feed costs, and the persistent impact of Avian Influenza in the European Union. Conversely, September 2023 saw a temporary drop in poultry prices, primarily due to ample supplies from major exporting countries like Brazil (FAO, 2023). These trends underscore the poultry sector’s vulnerability to external factors such as input costs, inflation, and global market dynamics. The interconnectedness of local and international markets plays a significant role in shaping retail prices, emphasizing the sector’s dependency on broader economic and trade conditions.

Figure 3: Average monthly retail prices for selected processed and unprocessed chicken products.

Source: Stats SA, 2024

Yellow maize and soybean market price trends

Maize is a vital agricultural commodity in South Africa, serving as a staple food for human consumption and a critical input for animal feed more specifically poultry. Yellow maize specifically contributes to poultry (broiler) feed and accounts for the largest share in the overall animal feed sales (USDA, 2024). The domestic maize market is characterized by significant price volatility, influenced by various interconnected factors including supply and demand dynamics. Approximately, 75% of South Africa’s maize produced is consumed domestically. In years of high yields, excess supply leads to a decline in prices. Conversely, drought years result in lower production levels, pushing prices higher to meet demand (grain SA, 2023) while international trade conditions and exchange rate volatility also have profound impact on maize prices. Research by Vink and Kirsten (2002) on the elasticity of maize prices in relation to the current real exchange rate, indicates that a 1% depreciation in the South African rand, is associated with a 1.16% increase in maize prices. In the recent past, climate variability, among other factors has compounded maize shortages in the region. The poultry industry is a primary consumer of animal feed derived from yellow maize, sunflower seeds and soybeans. Yellow maize, other than its energy value, is important for its high carotene levels, which are responsible for the yellow coloration of egg yolk, feet, shanks and skin. Similarly, soybean meal is the most widely used oilseed by-product because of its ability to provide indispensable amino acids, which complement most cereal-based diets. Amino acids are highly digestible and are low in undesirable substances (DTIC, 2023).

Figure 4 illustrates the trend of SAFEX yellow maize and soybean prices from January 2019 to July 2024. It is evident that the price trend for maize has been continuously rising, with some increases seen in the 2020 season and sharper increases seen in the 2022 and 2023 season, corresponding to price hikes for most poultry meat products as shown in Figure 3. For soybean prices there are huge fluctuations but with a generally increasing trend. Figure 5 illustrates the trend for yellow maize contract prices for this season and predictions for the subsequent months. Yellow maize contract price is at an all-time high, with the prices in December being reported to be above R5000, the highest it has ever been in the past ten years (SAGIS, 2024).

Figure 4: SAFEX prices of yellow maize and soybean

Source: Grain SA, 2024

Figure 5: SAFEX yellow maize contract prices

Source: Grain SA, 2024

CONCLUSION

The trend analysis highlights the interconnectedness of yellow maize and soybean prices with the poultry sector in South Africa. As vital components of poultry feed, maize and soybean exert a direct influence on production costs and retail prices of poultry products. Input price volatility, driven by factors such as climatic variability, exchange rate fluctuations, and global trade disruptions, significantly impact poultry market dynamics.

The poultry sector’s dependency on imported soybeans exacerbates its vulnerability to global supply chain challenges, further eroding producer margins and affecting consumer’s affordability. Rising feed costs not only erode the profitability of poultry production but also threaten food security, especially for low-income households which reliant on poultry as an affordable protein source.

Therefore, interventions aimed at stabilizing feed prices need to be prioritised to minimise reliance of imported soybean and sunflower. For instance, there is a need to further support the domestic production of soybean and sunflower from which oilcakes are extracted to enrich the yellow maize during feed formulation. Moreover, there is an opportunity to explore the use of insects as sources of protein in feed rations (see: Babarinde et al., 2021; Selaledi et al, 2021; Kolobe et al, 2023; Hancz et al., 2024; Ohwofasa et al., 2025). This is bound to enhance South Africa’s resilience against external shocks which lead to spikes in production costs in the poultry industry, culminating into high prices of poultry products.

ACKNOWLEDGEMENT

We thank the entire Agro-Food Chains unit team (T. Ntshangatse, T. Ningi, C. Dempers, L. Dladla, M. Lubinga) and V. Thindisa for valuable input. For correspondence contact: hlubinga@namc.co.za

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