PODCAST: Western Cape floods and agricultural conditions

The Western Cape, which accounts for more than two-thirds of South Africa’s winter crops and a large share of wine grapes and various horticulture products, faced heavy rain and destructive flooding recently. The rainfall peak was mainly at Bredasdorp, in the southern Overberg.  

Significant damages to farm infrastructure, electricity supply and road networks are reported in various small farming towns of the province, mainly the southern areas. Still, the impact of the floods on wine grapes and table grapes remains unclear as industry horticulturalists assess the fields. We have seen anecdotal evidence of damage at some storage facilities and crop fields in the southern regions of the province. 

Another challenge caused by wet soils has been the difficulties of tractors spraying herbicides and fertilisers, so some farmers now use drones to spray the fields. Perhaps this is a positive step towards technological advancement, accelerated by unfavourable weather.  

Regarding the winter crops – mainly wheat, barley and canola – the focus has been on whether the excessive rains would undermine the yield potential. As best as we can tell, and from various interactions with farmers in the Western Cape, we suspect the impact on crops will be minimal, but the harvest quality may be an issue. The southern regions could have some damage, but its scale remains unclear. We maintain a positive view of South Africa’s 2023/2024 winter crop harvest.  

On September 27 2023, the Crop Estimates Committee (CEC) released its second production estimates for winter crops and kept the wheat harvest at 2.1Mt, up 1% from the previous season. Importantly, this is well above the 10-year average harvest of 1.8Mt. This is supported by an expected large crop in the Western Cape and Limpopo, which overshadowed the anticipated decline in the Free State, Northern Cape and other provinces. This means that the crop conditions in the Western Cape are far more consequential for South Africa’s winter wheat harvest size. Monitoring crop conditions in the coming weeks is crucial.  

Assuming that there will be no major changes in the crop forecast in the coming months, a wheat harvest of 2.1Mt implies that South Africa will likely need to import about 1.6Mt of wheat to meet domestic consumption in the 2023/2024 season (down from the forecast 1.7Mt in the 2022/2023 season). Still, we must keep an eye on the CEC report of October 26, as this will detail the impact of the heavy rains in the Western Cape.  

Moreover, the 2023/2024 barley production is estimated at 389,920t (up 29% year on year). This will be the largest crop in three years and will mainly be supported by an expansion in the area planted and the anticipated better yields. The 2023/2024 canola crop is estimated at a record 230,950t, slightly down from last month (up 10% y/y). The annual uptick is also due to increased plantings and expected better yields.  

The next CEC report will also provide further insights into the yield expectations of these crops and whether the recent floods have had a more severe impact than we currently see. 

We discuss more in this week’s podcast segment.