WHILE farmers who managed to get good yields, they would be in a somewhat better financial position, as grain users-consumers and the livestock and poultry industries- would likely experience increased costs over the foreseeable future(although better than levels seen during the first half of the year), says Agbiz chief economist Wandile Sihlobo
He said that for the livestock industry, the higher feed costs come at a time when the industry also faced the effects of foot-and-mouth disease, which has led to a ban on the movement of cattle domestically and also exports in various markets, all additional financial pressure on the industry.
Sihlobo said after the Crop Estimates Committee released the 2021/22 summer crop harvest on Tuesday.
He said that while attention was shifting towards the upcoming 2022/23 summer crop season for South Africa, monthly updates from the 2021/22 season were worth monitoring.
On Tuesday afternoon, the Crop Estimates Committee (CEC) lifted its estimates for South Africa's 2021/22 maize production by 2 percent from July to 15.0 million tonnes. About 7.6 million were white maize, with 7.4 million being yellow maize.
“A harvest of 15.0 million tonnes is down by 8 percent from the 2020/21 season crop but well above the 10-year average maize harvest of 12.80 million tonnes and annual domestic consumption of 11.80 million tonnes. And thus, this implies that South Africa will remain a net exporter of maize, which we anticipate to be about 3.0 million tonnes in the 2022/23 marketing season,” Sihlobo said.
This marketing year corresponded with the 2021/22 production season. On 19 August 2022, about 12,0 million tonnes of the expected 15.0 million tonnes harvest had already been delivered to commercial silos. Agbiz said it expected further deliveries to continue in the coming weeks. It said the weather was favourable, with clear skies over South Africa over the next two weeks.
Another significant and most welcome adjustment in the data was the 1 percent increase in South Africa's soybeans harvest from July, estimated to a new record of 2.2 million tonnes.
Sihlobo said this large soybean harvest would help lessen South Africa's reliance on soybean oilcake imports.
He said on 19 August this year, about 95 percent of the tonnes had already been delivered to commercial silos. He said the country could see further deliveries in the coming weeks.
The sunflower seed was, unsurprisingly, lowered for the third consecutive month by 5 percent from July estimates to 876 050 tonnes.
Still, this was the third largest sunflower seed harvest on record.
“We suspected there would be a further monthly downward revision of the sunflower seed estimate because of the relatively lower (weekly) producer deliveries over the past few weeks. On 19 August, about 94% of the expected harvest was delivered.”
Besides these major summer crops, the sorghum harvest was estimated at 123 700 (-9 percent m/m), dry beans harvest at 52 590 tonnes (+2 percent m/m). Groundnuts were at 49 000 tonnes remaining unchanged from last month.
Sihlobo said that as with the previous releases, these domestic production data would have minimal impact on prices as global events and currency movements mainly influenced domestic grains and oilseeds prices.
“Global agricultural prices have come off the higher levels we saw following the invasion of Ukraine by Russia. Moreover, the resumption of grain exports in Ukraine has also added downward pressure on global agricultural prices, although marginal. Still, the grain prices are unlikely to return to the pre-war levels as various risks in the market remain,” Sihlobo said.
He added that for example, they still saw the lingering effects of the disruptions caused by the war on grain supply chains and markets.
“Additionally, the concerns about the impact of the drought in the Northern Hemisphere on the 2022/23 global grains and oilseed harvest, along with continued demand for grains in Asian markets, remain critical factors in sustaining prices are relatively higher levels than in the pre-war period.”
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