Optimism about SA maize harvest

--:--
The United States Department of Agriculture (USDA) 's Pretoria office is a key institution and it is worthwhile to keep an eye on their views. They recently released an updated view of South Africa's 2022/23 maize production season, leaning strongly towards the views of South Africa's Crop Estimates Committee (CEC).

They forecast the country's commercial maize plantings at 2,60 million hectares in the 2022/23 season, broadly aligned with the CEC, whose data points to a possible area of 2,59 million hectares. This area is slightly below the 2021/22 season of 2,62 million hectares.

Still, it is well above the long-term average. Considering the USDA's yield forecast of 5,70 tonnes per hectare, South Africa's maize harvest could amount to 15,00 million tonnes in the 2022/23 season, marginally down from 15,33 million tonnes of the 2021/22 season. Still, this will be well above the annual consumption of 11,80 million tonnes and maintains South Africa as a net exporter of maize. Under such conditions, South Africa's maize exports could be above 3,00 million tonnes.

The usual export destinations for South Africa include Taiwan, Japan, Vietnam, South Korea, Botswana, Italy, Namibia, Eswatini, Mozambique, Spain, Lesotho, Angola and Zimbabwe, amongst others. These markets, especially the offshore ones, will likely remain dominant in South Africa's export list.

The countries whose imports could decline, depending on how widespread the favourable rains are, are the southern African countries. In the La Niña years, the whole region receives higher rainfall which should support crop production. The major issue that farmers in some southern African countries could struggle with is the higher input costs.

In the 20221/22 season, the likes of Tanzania saw a decline in fertilizer usage because of higher prices, which reflected in lower yields in some regions. With the fertilizer prices still over 20% higher than last year, although having softened from the months after Russia invaded Ukraine, the current levels are still relatively high and costly to farmers.

Regarding the subsistence farmers, the USDA forecasts an area of 300 000 hectares, down from 379 000 hectares in the previous season. With a yield expectation of 2,00 tonnes per hectare, subsistence farmers' production could amount to 600 000 tonnes in the 2022/23 season. This is also down from 657 000 tonnes in the previous season. Still, this is a decent harvest and will help cover the household needs in various communities.

In this week’s segment of the podcast, agricultural economist Wandile Sihlobo, provides more color on these dynamics and their impact on grain prices.

Credit:

Production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli
28 Nov 2022 English South Africa Investing · Food

Other recent episodes

SA farm jobs up 7% year-on-year

Wandile Sihlobo unpacks the latest agriculture trends and statistics in this podcast. After a notable jump in the third quarter of 2023 to 956,000, South Africa's primary agricultural employment fell by 4% quarter-on-quarter to 920,000 in the last quarter of 2023. Jobs declined mainly in the Eastern Cape, Western Cape,…
26 Feb 13 min

Excessive heat across SA summer crop regions is worrying

The excessive heat across South Africa currently is a significant concern for the farming sector. The 2023/24 summer crop season started on favourable footing. We received widespread rains, which was unusual in an El Niño season, which would typically start with drier weather conditions. According to data from the Crop…
19 Feb 12 min

Weak agricultural machinery sales

We start the year with reasonably weak agricultural machinery sales data. South Africa's tractor sales were down 26% y/y in January 2024, with 353 units sold. At the same time, the combine harvesters were down 50% y/y, with eight units sold. At face value, this could be viewed as a…
13 Feb 11 min

A promising summer grain outlook

South Africa could have yet another decent summer grains and oilseeds harvest in the 2023/24 production season. The data released this afternoon by the Crop Estimates Committee puts the preliminary area plantings for summer grains and oilseeds at 4,41 million hectares, up by 0,4% y/y (albeit down mildly from 4,48…
5 Feb 12 min

SA to export beef to Saudi Arabia

One positive bit of news I noticed this past week is about South Africa's beef industry, with an encouraging headline stating, "Saudi Arabia to start South African meat imports as ban ends". This means everything is now in order for Saudi Arabia to import beef from South Africa. The Kingdom…
30 Jan 12 min