Fear of maize imports allayed
The industry has been battling dry and erratic weather patterns, which almost forced commercial farmers in major maize producing regions out of business and saw them approaching the government and banks in January to raise at least R3billion to help those hardest hit by the drought.
However, in its report on the revised area planted estimate and second production forecast for summer crops for 2019, released on Tuesday, the Crop Estimates Committee said maize was planted to 2.3million hectares (ha), with an expected yield of 10.56million tons.
Sunflower seed was planted to 515350ha, soybeans 730500ha, groundnuts 20050ha, sorghum 50500ha and dry beans 59300ha.
FNB Agri-Business senior agricultural economist Paul Makube said for the summer grains, the season was off to a good end with good rains boosting crop prospects. “The only concern is the possible crop damage if frost comes in earlier than expected in areas where the maize plantings were very late,” Makube said yesterday.
He said the short- to medium-term weather outlook still called for rains across the producing areas.
“(This) bodes well for the developing crops and a good finish to the 2018/19 summer crop season.”
Makube said the expected carry-over maize stock of 3.2million tons by the end of the 2018/19 production season would bring the total supplies for 2019/20 to 13.76million tons - enough to meet the country’s consumption requirements.
Makube said adequate supplies of grain for the year ahead would help limit further food price acceleration in the medium term. “This is good for interest rates, which are expected to remain flat,” he said. “The agriculture GDP is expected to still disappoint in the near term, but will rebound marginally in the second half of 2019 and thereafter accelerate into 2020.”
Grain SA chief executive Jannie de Villiers said a ton of maize cost about R2000 and that the consumption of maize reached a record high last year. “This means the market is absorbing what we are producing,” he said.
De Villiers said the agricultural outlook for 2019 was positive for farmers, although admitting: “We had a very few tough years behind us.”
He said an average farmer borrowed between R8 to R10million from banks.
“The risk is that he puts this R10m in the soil and prays for rain,” said De Villiers, adding that profitability was a bigger threat to farmers than the government’s land reform programme.
Makube said challenges the industry was faced with included the encroachment of the mining industry into fertile agricultural land, pollution and climate change among others.