Lower wheat production and its effect on the economy.
The expected commercial production of wheat in South Africa is about 1.4 million tons, which is almost 23% less than the previous season. The decline was driven by poorer than expected yields, especially in the Swartland area. In the Western Cape 325,000 ha of wheat had been planted of which 200,000 hectares had been planted in the Swartland. Importing plans are already underway to supplement SA’s local demand for wheat. Looking solely at the wheat industry in the Western Cape, the industry estimates a loss of about R1.7 billion to R2 billion in gross incomes.
Summer rainfall areas are likely to receive late summer rains, which could result in late winter rainfall again for the
Western Cape. However with prudent financial planning, risk mitigating strategies and sustainable farming practices we believe our producers will find a way to get through this challenging time and prosper!
“An industry that feeds you, is an industry worth fighting for” – Unknown.
Grains & Oilseeds
- Total maize area planted estimate is 2.3 million ha, 12.2% (319 400 ha) less than the previous season area of 2.62 million hectares. Producers had initially intended on planting 2.47 million hectares but due to very warm weather and lower than expected rainfall in the western parts of South Africa’s maize belt, some farmers were not able to sow their intended area.
- Planting season for maize is over. The summer rainfall season had a late start but there’s anticipation that the second part of the summer season will be much better, which will help soil moisture levels, veldt conditions and dam levels.
- The wheat industry is in a difficult place with profit margins heavily squeezed. The industry has to survive in a time faced with burdensome global stocks, lower local yields coupled with stronger local currency supporting imports. Probability of light falls over the Southern Cape is high, which should provide some relief. Some industry players are adding a livestock component and reducing the percentage of land sowed under wheat to mitigate their risk.
- CEC’s preliminary soybean area planted estimates is 701 000 hectares, slightly lower than the intentions (720 000 hectares). Unfavourable weather and growing conditions caused the decline. The 701 000 hectares however is 22% higher than the 2017 area planted (573 950 hectares). Mpumalanga, North West and Free State soybean and sunflower growing areas will likely receive between 50-150mm rainfalls in the next two weeks, which should support growing conditions.
- The weather was dominated by dry and hot conditions for the first three weeks of January 2018 over most of the country, this negatively impacted moisture levels on the veld. Natural grazing as well as cultivated pastures were not producing, causing the condition of animals to deteriorate.
- Short term forecasts favour improved conditions for rainfall for the next weeks over the summer rainfall area, especially the central parts like the Northwest province, the Free State, eastern parts of the Northern Cape and parts of adjacent provinces. This may improve veld conditions.
- Egg prices are following an upward trend, following recent bird flu outbreaks in some regions, leading to shortages of eggs. Production prices for Jumbo eggs in Rands per dozen have increased by 38% during November 2017 compared to November 2016, from R18.27 rand per dozen to R25.14 Rands per dozen.
- 30% fewer cattle was slaughtered during December 2017(225 744) compared to December 2016 (322 554).
- 31% fewer head of sheep was slaughtered during December 2017(470 041) compared to in December 2016 (681 611).
- 20% fewer pigs were slaughtered during December 2017 at 193 982 heads compared to 242 728 heads during December 2016.