Big wheat harvest ahead

INCENTIVE: HIGHER PRICES DUE TO UKRAINE-RUSSIA WAR ▶ ▶ Excessive rain in most regions of SA improved soil moisture.

Wheat is now of major interest

South Africa had a fairly good agricultural production season in 202122 with wheat at 2.3 million tons, which is the largest harvest in 20 years, and record yields in some crops such as canola and oats.

The large harvest was on the back of an expansion in area plantings and favourable weather conditions that supported the yields. The 2022-23 winter crop season will now commence at the end of April, mainly in the Western Cape, and the following months in other provinces such as the Free State, Northern Cape, Limpopo and North West.

The major concerns for farmers ahead of the season are the rising inputs costs; fuel, fertiliser and agrochemicals. The prices of fertiliser and agrochemicals are up by over 50% compared to a year ago and the fuel price is at record levels.

The concern about rising farm input costs was also echoed by grain farmers’ representatives in our engagement last Friday.

Still, they remained optimistic that the plantings would not decline from levels of the past season. The view is that the relatively higher agricultural commodities prices, which are partially supported by the current Russa-Ukraine war, will incentivise farmers to maintain fairly large plantings in the 2022-23 production season starting next month.

Moreover, I believe that the excessive summer rainfalls in most regions of South Africa helped improve soil moisture. Thus, key wheat-producing provinces such as the Free State, Northern Cape and North West could see plantings improve from the previous season.

This is all speculative for now and we will have farmers’ intentions to plant winter crops data released by the crop estimates committee on 26 April.

Importantly, wheat is now of major interest since the Russia-Ukraine

war started. South Africa currently imports about half of its annual wheat usage. The improvement in the 2021-22 harvest to 2.3 million tons led to a slight reduction in imports to 1.48 million tons, from 1.52 million tons in 2020-21 marketing year.

Fortunately for the near term, South African millers and food processors have now brought 704 050 tons of the expected imports to our shores as of the week of 11 March.

The 2021-22 marketing year will end in September.

Even if production is to increase in the 2022-23 production season, we doubt that South Africa would be self-sufficient in wheat production in the near term. There are limitations in production because of unfavourable climatic conditions for wheat production in some provinces and profitability challenges.

The latter led to the decline in wheat production in some areas of the Free State over the past couple of years as farmers switched to other crops. The changing climate also played a part to an extent.

Therefore, an increase in production would help lessen the import dependency but won’t change the reality of SA being a net importer of wheat. If anything, the change could come in future through improvements in breeding.