April is an important month for SA’s agriculture.
Today, April 30, we are due to receive the Crop Estimate Committee’s (CEC) third production forecast for the summer grains and oilseeds, which is typically a stronger indication of how the season’s harvest will look as the crop has largely passed the pollination stages.
At the same time, we get the CEC data on farmers’ planting intentions for winter crops.
The two sets of data provide broad guidance on how farmers perceive the upcoming winter crop season and their planting plans.
This view is primarily informed by the weather outlook, winter crop prices and the availability and cost of inputs, among other considerations.
The outlook has remained broadly positive for the 2024/2025 summer grains and oilseeds.
CEC projections at the end of March placed SA’s 2024/2025 grains and oilseed production at 18-million tonnes, up 16% from the previous season.
This comprises maize, sunflower seed, soybeans, groundnuts, sorghum and dry beans.
While planted late by roughly a month, the crop benefited from the excellent rains these past few months.
It is likely that when the CEC releases an update at the end of April, it will maintain a decent harvest or possibly lift the estimates slightly.
We have already seen the Pretoria office of the US department of agriculture (USDA) publishing slightly higher estimates for some grains than the Crop Estimates Committee.
The USDA forecasts SA’s 2024/2025 commercial maize production at 15.3-million tonnes, up 20% from the previous season.
Meanwhile, the CEC forecasts SA’s 2024/2025 maize harvest at a slightly lower figure of 14.6-million tonnes, up 13% year on year.
Thus, we believe that there remains a likelihood that the CEC could lift its figures a bit as weather conditions have remained broadly positive since the last estimate.
The one significant risk for the 2024/2025 summer grains and oilseed is the excessive rains we saw this month, which could present quality challenges in crops in regions that are planted early in the season.
We are also concerned that that the fertiliser application process may not have been as optimal in some areas because of the excessive rains.
Still, this will likely be an excellent season regarding crop output size.
However, the quality of the crop is something worth monitoring closely.
When the CEC releases its crop forecasts, it may not opine on the quality issues.
Therefore, engaging with commodity associations about how they see crop quality for various regions may be more beneficial to understanding seasonal crop prospects better.
Regarding the 2025/2026 winter crop season, our focus will primarily be wheat, barley and canola.
The major uncertainty is the weather prospects for the winter season.
In its monthly Seasonal Climate Watch, the SA Weather Service (SAWS) has recently signalled prospects of a relatively drier winter season.
SAWS stated that “the southwestern parts of the country are expected to receive below-normal rainfall during the forecasted seasons”.
These regions include the Western Cape, where more than two-thirds of SA’s winter crops are cultivated. Still, it is too early to be certain.
The update for this month will perhaps be more informative about the weather prospects for the season.
A more comforting path for now regarding the upcoming winter crop season is input costs, which are largely down from last year.
However, prices of some fertiliser products and agrochemicals are somewhat up from a year ago.
SA is a net importer of fertilisers and agrochemicals and is exposed to exchange rate fluctuations that may also present some price risks in the current intense geoeconomic environment.
Regarding commodity prices, while the 2025/2026 global wheat prospects remain promising, with the International Grains Council forecasting the harvest at 805-million tonnes, up 1% year on year, the stocks are slightly tight.
The tighter stocks result from strong consumption and usage of wheat.
Thus, we continue to see prices elevated from last year’s levels.
In essence, SA’s agriculture is in a critical month that guides us about the possible fortunes of the sector.
On both summer and winter grains, the weather remains the major risk on the path forward.
Still, there is sufficient reason to be optimistic.
- Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of SA.
The Herald
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