Foot-and-Mouth outbreak sends meat prices to 8-year high despite softer headline inflation

South Africa’s annual inflation rate may have slowed in January, but consumers are feeling mounting pressure at the meat counter as beef and pork prices surged to multi-year highs on the back of the Foot-and-Mouth Disease outbreak.

Data released by Statistics South Africa (StatsSA) on Wednesday showed headline consumer price inflation edged down to 3.5% in January from 3.6% in December 2025, returning to its November level.

Nolan Wapenaar, head of fixed income and co-chief investment officer at Anchor Capital, said the January consumer prices reading reflected a broadly contained inflation environment.

“This inflation print remains comfortably within the SA Reserve Bank's (Sarb) target band, with pressure concentrated in administered prices and services rather than broad-based goods inflation," he said. "Overall, a relatively uneventful print."

While fuel price relief with a -3.1% monthly change for petrol and moderating cereal costs helped contain overall price growth, meat inflation accelerated sharply, offsetting gains elsewhere in the food basket.

The annual rate for meat climbed to 13.5% in January from 12.6% in December, the highest since December 2017 when it reached 13.9%.

According to StatsSA chief director of price statistics Patrick Kelly, three beef products recorded the highest annual increases among all 391 items tracked in the CPI basket.

"Three beef products recorded the highest annual rates of all 391 products in the CPI basket. These were beef steak rising by 31.2%, stewing beef up to 30.3% and beef mince at 28%," Kelly said.

Even typically cheaper cuts were not spared. Beef offal inflation accelerated to 17.2% from 10.5% in December, while pork prices jumped sharply to 19.5% from 11.5%. 

Pork prices also recorded a sharp acceleration, rising 19.5% compared with 11.5% the previous month.

The sharp escalation in meat prices stands in contrast to broader food inflation, which remained steady at 4.4% for a third consecutive month, as several key categories showed notable easing.

Despite the benign headline print, economists warn that meat prices remain a key risk to the inflation outlook as the ongoing Foot-and-Mouth Disease.

Dr Elna Moolman, head of South Africa macroeconomic research at Standard Bank Group, said while overall inflation pressures remain contained, biosecurity challenges continue to cloud the outlook for meat prices.

“Foot-and-Mouth Disease poses a risk to meat prices, although there seems to be encouraging progress with procuring vaccines,” she said.

“Benign inflation should create scope for the Reserve Bank to cut interest rates further this year, which should provide some support to consumer spending growth.”

The government has announced that the first batch of 1 million high-potency vaccine doses from Biogénesis Bagó in Argentina is scheduled to arrive in South Africa this weekend. This shipment is the first phase of a broader agreement, with a further 5 million doses set to follow in March.

Economists at Nedbank are also expecting food inflation to remain elevated in the near term, driven mainly by meat prices linked to the ongoing impact of Foot-and-Mouth Disease.

They forecast inflation will trend moderately higher over the next two months, peaking around 3.7%, before easing again later in the year.

"Progress in the vaccination rollout has been slow amid medication shortages, and as a result, meat inflation is only expected to fall back to single digits by around May. Nonetheless, lower global food prices and strong domestic crop production will help cushion the impact," they said.

"Overall, we expect inflation to average 3.4% in 2026 before declining towards 3.1% in 2027. We believe that the benign inflation outlook, together with subdued growth outcomes, should persuade the Sarb to resume its cutting cycle in the second quarter."

Nedbank is forecasting two 25-basis-point cuts in the repo rate in May and July, bringing it down from the current 6.75% to 6.25%. 

Meanwhile, FNB senior economist Koketso Mano expects headline inflation to ease further to around 3.2% in February, supported by additional fuel price cuts.

However, Mano cautioned that food inflation presents volatility risks as biosecurity issues, including Foot-and-Mouth Sisease and African swine fever, continue to affect agricultural markets.

"We think food inflation still presents volatility risk as biosecurity issues (Foot and Mouth disease and African Swine Fever) continue to impact the agricultural market," Mano said.

"Fortunately, there are counterbalances, with softer cereal commodity prices expected to filter through to consumer costs alongside continued softness in vegetables." 

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