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Published carcass prices should not be used as a benchmark when you want to sell your cattle or sheep, they reflect past market trends, not current prices.
Producers often question why meat prices reported in the media differ from what they actually receive. On social media and other platforms, it is common to read concerns that prices are either higher or lower than those published. To clarify this, Stockfarm consulted the National Red Meat Producers’ Organisation (RPO) to explain how carcass prices are determined and made public.
The data collection process
Dr Frikkie Maré, CEO of the National RPO, explains that by the time carcass prices are published, they are already a week old. This delay is due to the time required to collect and process the data. “In other words, published prices should not be used as a benchmark when you want to sell your cattle or sheep,” he explains. “Their goal is rather to reflect market trends that have developed over the past week or two.”
Information is gathered weekly from various industry participants, such as auction houses and abattoirs. These entities operate over the course of a full week and only calculate their average prices at the end of that period.
Prices also vary across regions. Each province – and even individual towns or cities – faces unique conditions. Some areas may have an abundant supply but are located far from major markets, whereas others have a limited supply but benefit from proximity to buyers. Consequently, prices differ across the country, and the red meat prices published weekly represent an average of these variations.
The collected data is consolidated weekly by a third party – in the case of carcass prices, this role is fulfilled by the Red Meat Abattoir Association (RMAA). Institutions such as Absa also compile a price report by combining data from multiple sources. By the time this information reaches the public, it can only reflect the previous week’s market activity.
Although historical, these prices are valuable for identifying trends, Dr Maré explains. By comparing current trends with those of previous years, producers can gain insight into market behaviour such as seasonal price patterns, periods of oversupply or undersupply, and times when prices strengthen or weaken.
These trends also help traders make more informed purchasing decisions aligned with their business strategies.
Competition legislation
In addition to the timeline involved, price reporting must comply with South Africa’s competition laws. The Competition Commission monitors food prices, including red meat, to ensure fair practices in the food chain and to protect consumers.
Dr Maré notes that strict reporting regulations are in place to prevent price manipulation and collusion. “As a producer organisation, we are not permitted to set or influence prices for our members. Any such interference by the National RPO or provincial RPO branches could undermine negotiations between buyers and sellers, and restrict competition. In a free market, prices are determined through buyer-seller transactions.”
Another requirement is that data must be reported at the same frequency at which it is determined. For instance, auction houses operate weekly, and abattoirs often set prices that are valid for a week. The average price for that period is then calculated and published.
Because red meat prices are determined weekly, the data can only be released the following week. The same principle applies to prices determined daily.
Regional price differences
Prices must be published as an average for a broad region and may not be broken down into smaller areas or provinces.
Livestock and carcass prices vary considerably between and within provinces due to supply and demand dynamics. For example, the Northern Cape has a large supply of mutton but is far from key markets, so abattoirs need to factor transport costs into their operations. Regions such as the Western Cape or Gauteng, on the other hand, may have lower supply but benefit from closer proximity to markets and reduced transport expenses.
Dr Maré emphasises that the prices published by organisations such as the RPO should be viewed as indicators of market activity and the direction the red meat industry is heading. He advises producers to build strong relationships with their agents and abattoirs, as these are the points where prices are ultimately negotiated.
Since the prices producers are paid for their livestock are not fixed, there is always room for negotiation, allowing buyers and sellers to reach mutually beneficial agreements. – Koos du Pisanie, Stockfarm
Contact Dr Frikkie Maré at 084 446 6787 for more information.
