Forecasts by industry experts

Following a year of unpredictable weather conditions and a volatile economic environment, Farmer’s Weekly takes a look at the outlook for crop and livestock production in 2019.

Mixed expectations for grain production in 2019

The South African maize industry is expected to enter 2019 with a carry-over stockpile of about 3,3 million tons, according to Grain SA agricultural economist, Luan van der Walt.

Given the Crop Estimates Committee’s (CEC) forecast that 2,44 million hectares of maize will be planted in the 2018/2019 season, along with the current high supply levels, maize prices would likely remain on export parity during 2019, he said.

Production conditions in the latter half of the maize production season would be the determining factor in terms of the maize price. Should the drought conditions continue into 2019, the price may increase. “It is, nevertheless, important to keep the fairly large carry-over stocks in mind as it will add to the next season’s supply,” he said. However, Anton Botha, a maize producer near Bultfontein, said he was positive about the maize price in 2019.

At the end of November 2018, the price of maize for delivery in July 2019 was R2 000/t, which had already exceeded the price of R1 800/t realised during the previous year. According to Botha, if an above average yield was achieved, however, maize producers would need a price of at least R2 300/t in 2019.

WINTER GRAINS

According to Van der Walt, South Africa was expected to remain a net importer of wheat, as the local wheat price would continue to be derived from international market prices and the exchange rate of the rand against major currencies in 2019. “Producers will be well advised to hedge prices in 2019 and to trade wheat as soon as prices rise.”

The CEC’s forecast for wheat production in the 2018/2019 season was about 1,86 million tons, or a 21% increase from the previous season. Barley production was estimated to reach almost 402 000t, which was 30,8% higher year-on-year.

Danie Minnaar, a grain producer near Bothaville, added that if more export opportunities for grains, and maize in particular, were found, it would continue to benefit the summer grain value chain in 2019.

“This could result in our moving away from export parity to import parity, something we desperately need,” he said. – Annelie Coleman