are more integrated in the value chain will be in the best position to survive the low demand for weaners, expensive fodder and slow demand, and will be better able to absorb expected financial losses during 2016/17, which will mainly be the result of very expensive and/or scarce fodder. A livestock farmer’s first response to the start of a drought is to supply animals with additional feed/fodder in a bid to save the herd, while hoping that the rain will soon come. As soon as the farmer learns that the drought may be long term, he will usually dispose of all the “additional” live stock on the farm in an attempt to save the core breeding herd, protect the remaining natural grazing and postpone the possibility of applying a full feed ration to animals for as long as possible12. The slaughtering of these “additional” animals usually creates a short-term over-supply of meat during which the consumer will notice a price decrease – or a lower-thanexpected price increase – of red meat. The market may also see exports to markets where a better price can be realised13. A price increase in red meat can be expected only six months to a year after the drought has been broken. After sufficient rains, farmers will start rebuilding their herds and little to no animals will be slaughtered during this period. Herd rebuilding may take up to 7 years to complete, as was proven in the United States where the price of cows reached record high levels in 2014-201514. With the natural grazing in South Africa that has been depleted, very little grazing capacity is left. Although farmers struggle to keep core breeding herds alive, fodder is limited and extremely expensive due to the past three years’ drought conditions. Willemse, Strydom and Venter15 report that thousands of cattle and sheep have died, 12 Maré, F. & Willemse, J. (2016). Expected implications of the 2015 drought on the red meat industry. Available at http://rpofs.co.za/images/nuus/2016/Expected-implications-of-the-2015-drought-on-thered-meat-industry.pdf. 13 Ibid. 14 Willemse, J., Strydom, D. & Venter, M. (2015). Implications of 2015 drought on economy, agri markets and consumers. Available at http://www.growinggreatness.co.za/implications-of-lingering2015-drought-on-economy-agricultural-markets-food-processors-input-suppliers-and-consumers/. 15 Ibid.