Wandile Sihlobo: On the hunt for greener pastures

Almost every December holiday I drive from Gauteng to the Eastern Cape, not only to enjoy the majestic views on the way, but to also use the opportunity to do a mini crop tour.

In a normal rainfall season the vegetation would be green all the way, particularly with recently emerged maize and soybean fields in the Free State and Gauteng, and in-between with livestock pastures.

I left Pretoria yesterday morning with an inkling that this time around the journey would not be as amazing as the previous years, as many areas have not received sufficient rainfall, and that would have led to delays in planting activity.

My suspicion was confirmed just as we left Johannesburg on the stretch to Kroonstad. This area was largely brown fields of soil preparation. That was mainly the case all the way to the Free State.

There were a few green fields, but those were mainly under irrigation. Conditions were worse between the southern Free State into the Eastern Cape, with the only visible green patches being along the main rivers – with irrigation.

Drying up

All of this dovetailed with the information we have been receiving from farmers, specifically in the Free State and North West, as well as weather reports of dryness in these areas.

In my conversation this morning with Corne Low of Grain South Africa, it became clear that the North West is in an even worse position than what I saw in the Free State, with the dryness leading to low planting activity in the area.

The promise of sunflower seeds

Given that it is already late in the year for additional maize planting, it is good to look at the possibilities of sunflower seed planting as they can still be planted until January 2019. It is increasingly becoming clear that the optimistic views on an increased planting area that farmers expressed earlier in the year will not materialise.

READ: Wine grape vineyards on the road to recovery after debilitating drought

Remember, in October 2018, South African farmers intended to increase the area planting for summer grain and oilseed by 5% from 2017/18 season to 4.03 million hectares.

Most summer crops were expected to show an uptick, with the exception of sunflower seed and groundnuts. This was partly driven by the favourable agricultural commodity prices.

At the moment, SAFEX yellow and white maize prices are up by over 30% from levels seen in December 2017 largely due to the aforementioned weather challenges.

The question in many people’s minds is: how much area will actually be planted for major grains and oilseeds, and what impact all of this will have on South Africa’s food inflation and agricultural economic growth?

In this regard, it is clear that the optimistic estimate that we, at the Agricultural Business Chamber of South Africa (Agbiz), expressed of 12.2 million tonnes for maize, might not materialise, due to large areas not having been planted, and weather conditions remain dry.

Moreover, our colleagues at the Bureau for Food and Agricultural Policy (BFAP) have recently lowered their estimate for South Africa’s maize harvest to 10.4 million tonnes. 

From a government perspective, the national Crop Estimate Committee will release its view on the area planted at the end of January, and that will give us a sense of the potential size of the crop for the 2018/19 production season.

What we know at the moment is that things are not looking good.

But let me end with an optimistic note by highlighting that South Africa will have roughly 3.3 million tonnes of maize stocks at the end of the marketing year in April 2019.

So the 2018/19 production crop will build onto something when we start the 2019/20 marketing year in May 2019.

All of this made the drive to the Eastern Cape unpleasant, but most importantly, educational; as we learnt about the conditions on the ground. I hope that when I drive back there will be some green shoots in the fields - even if it's sunflower seed - and improvement in the pastures.

Wandile Sihlobois an agricultural economist and head of agribusiness research at the Agricultural Business Chamber of South Africa (Agbiz). Follow him on Twitter: @WandileSihlobo

ZAR/USD
17.04
(-0.38)
ZAR/GBP
21.81
(-0.11)
ZAR/EUR
19.90
(-0.12)
ZAR/AUD
12.03
(-0.12)
ZAR/JPY
0.16
(-1.12)
Gold
1860.65
(+0.03)
Silver
22.87
(+0.11)
Platinum
844.51
(+0.50)
Brent Crude
42.23
(-0.12)
Palladium
2207.00
(+0.59)
All Share
53587.11
(-1.22)
Top 40
49547.74
(-1.16)
Financial 15
9401.28
(-1.95)
Industrial 25
72949.70
(-1.72)
Resource 10
53453.42
(-0.10)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1368 votes
It depends on how the funds are used.
73% - 8867 votes
No. We should have gotten the loan elsewhere.
16% - 1959 votes
Vote