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Picture: 123RF
Picture: 123RF

Over the past few weeks I have travelled across most regions of SA for meetings with agribusinesses and framers, which was also an opportunity to view the summer crop planting progress.

Positively, in many areas farmers planted early in the season, with soil preparation having started as early as September, particularly in the eastern and central parts of SA. Planting is now in full swing in these parts of the country, with mainly the western regions yet to see notable progress.

On the upside, the season started with favourable soil moisture from the past season. Furthermore, the rains of the past couple of weeks improved field conditions and added to optimism about the outlook for the season.

Still, concerns over El Niño have not gone away. Farmers are keeping a close eye on things and are worried about its potential impact. What has provided comfort so far is the favourable early rainfall. And weather forecasts consistently paint a promising picture that rain may continue until early March, which is when the El Niño-induced dryness is expected to start.

The farmers we interacted with were not deterred by these concerns. They believe the SA Crop Estimates Committee’s expectation that the 2023/24 summer grains and oilseed planting will increase by 2% to 4.5-million hectares is likely to materialise. Moreover, the view from farmer organisations suggests they also see reasonably encouraging sales, further supporting the optimistic view about crop planting.

These promising production conditions are favourable for the broader field crops, horticulture, and livestock and poultry subsectors. All production by the horticulture industry is under irrigation, and dam levels have improved notably and are now above average in most areas.

Still, with consistent electricity interruptions due to load-shedding, rainfall plays a pivotal role in supplementing the irrigation system, so the expected showers over the next three months will support production conditions in fruit and vegetables.

The same is true for the livestock industry, where the past rainy seasons improved the grazing veld and thus supported the industry. The next few months’ rainfall is vital to further improve conditions and thus provide necessary feed when the time of need arises during the winter season and the dry patch of an El Niño.

Notably, the livestock and poultry sectors mainly depend on feed availability and affordability, mostly yellow maize and soya beans. Therefore, the conducive production conditions for such crops in turn support the livestock and poultry industries.

The one aspect worth monitoring, as I have communicated previously, is heat. The SA Weather Service has signalled that “minimum and maximum temperatures are expected to be mostly above normal countrywide”.

Given the challenging conditions that excessive heat presented to farmers in the northern hemisphere, this is something livestock and poultry farmers will have to watch and they will have to try to find ways to minimise animal heat stress.

Assuming the positive outlook I have painted above materialises, the fears of an El Niño impact on food prices will be eased in the first quarter of 2024. In recent SA Reserve Bank monetary policy committee communications this weather phenomenon was rightly outlined as a potential risk.

However, if it intensifies only from March, as the SA Weather Service recently forecast, SA will have a good agricultural season with ample supplies, which should help ease food price inflation concerns.

While weather risk will be top of mind over the coming months, it is also important to keep a close eye on geopolitics and the impact on global agriculture. SA is a small, open economy, and agricultural prices mainly follow the global trend. So, in addition to domestic production conditions, global factors are worth monitoring.

All else being equal, I remain optimistic about SA’s 2023/24 agricultural production performance.

• Sihlobo is chief economist at the Agricultural Business Chamber of SA and a senior fellow in Stellenbosch University’s department of agricultural economics.

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