Now RCL Foods has to deal with bird flu

RCL Foods has culled an estimated 420,000 birds to date at a cost of R115m, joining other poultry producers in efforts to contain the bird flu crisis sweeping across the industry.

At least 11 of the 19 Rainbow Chicken sites in the inland region have been affected by the virus, RCL Foods said in a statement on Thursday, up from just eight recorded a week ago.

The virus, new in SA and identified as H7N6, has spread from Mpumalanga, where it was detected in early June, to Gauteng, parts of Limpopo and Rustenburg in the North West.

The mass culling of egglaying chickens has raised concern about potential egg shortages and increase in prices.

Over the past week, Quantum Foods said several of its farms in Gauteng and North West have been affected. SA’s biggest poultry producer, Astral Foods, has also reported on the problem.

The outbreak of the bird flu strain is another blow to the poultry industry, which is still beset by load-shedding-related costs. However, grain prices have since come down materially since hitting historic highs in the aftermath of the Ukraine war. Still, the re-emergence of the El Niño phenomenon that is typically accompanied by hot, dry weather has cast a shadow on the outlook for global prices of soft commodities, which poultry producers use as inputs.

RCL is one of SA’s biggest food companies, owning an assortment of brands ranging from Sunbake and Selati sugar to 5 Star Super Maize Meal and Rainbow Chicken.

The company bought Foodcorp 10 years ago, which gave it exposure to a wider array of branded consumer products.

RCL Foods shares were down 3.75% to R8.99 in midday trade on the JSE, having lost nearly 21% over the past month, according to Infront data.