A look at how load shedding is impacting not only KFC but the chicken industry

The question of which came first in the current shortage of chicken, between load shedding and high sales, has come up for reckoning as major quick service restaurant (QSR) KFC announced a scaling down of restaurants due to the impact of power blackouts.

In response to an enquiry through its public relations firm, Yum Brands said some of their suppliers have experienced immense operational disruption due to consistent and intense load shedding throughout 2022.

“This means we are experiencing some constraints on our supply chain, which although are currently limited, have impacted some of our restaurants. We are working closely with our suppliers to ensure they have sufficient back-up power so that these constraints are resolved soonest,” it said.

The South African Poultry Association (SAPA), whose members are mainly the mammoth producers, said it was not aware of shortages except that it was par for the course in the festive season.

“Poultry sales will decline over the next few months and we will see increased sales over April/Easter. This is par for the course and we do not expect this to impact price,” SAPA spokesperson Alex de Coning said in response to enquiries.

This comes as South Africa passes the 200-day mark of load shedding already estimated to shave off a chunk of the country's economic growth leading to a 0.1% growth forecast.

Consumers though reported being turned away from some KFC outlets due to the shortage of chicken.

AN ISSUE IN A NUMBER OF STORES

It should be noted that consumers are feeling the chicken pinch everywhere. One consumer said they had failed to get a full chicken in major retailers that included Spar and Pick n Pay. They finally obtained a full chicken at Woolworths.

A LOOK AT HOW THE AGRICULTURAL SECTOR IS SUFFERING

In a recent survey of the agricultural sector in the province, Agri Limpopo found that 146 farmers out of 154 that were quizzed were affected, with about 116 farmers stating they they use a generator when load reduction is being implemented.

The survey found that the farmers’ cumulative cost of running generators amounted to R304 855 per day, with each farm’s bill reaching an average of R2 628.

It also said that some farmers noted a lack of electricity as a biosecurity risk, forcing them to deviate from standard operating procedures.

One farm reported a mortality rate of more than 2 000 chickens, and another moved to halt broiler farming because of their inability to raise chicks without heating.

Chicken farms are also losing large quantities of chicken each hour spent without heating, Agri Limpopo said.

“We cannot continue to absorb costs associated with poor and failing governance. The continued sustainability, let alone growth and global competitiveness of the agricultural sector, is at stake,” Deidre Carter, CEO of Agri Limpopo, said.

Head of SA Poultry Association’s broiler board, Izaak Breitenbach, at the height of load shedding said the rolling blackouts and unexpected outages also create a “logistical nightmare” with abattoirs running on limited storage capacity.

“Most of the abattoirs will have one and a half days’ worth of storage capacity. If there’s load shedding, the whole supply chain is impacted. We can’t get product to the customers, (and) we can't get the chicken to the abattoirs,” he said.

In one instance, an abattoir that slaughters a million birds weekly spends around R100 000 per hour during a power outage, he said.

South Africa's worsening electricity crisis is burdening the poultry industry, with some producers and abattoirs losing large quantities of chickens and money daily.

The impact of load shedding on the poultry industry is diverse and affects operations along the value chain.

“When we talk about the poultry industry, you’ve got chicken houses; when those are without power, the farmers will lose money because birds will not feed, birds will not drink… In general, there will be a loss of income,” he said.

The industrial abattoirs, which form a big part of the industry, although most have generators, are also affected because of the steep costs of running them.

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