Rosch

ADVERTORIAL

OLD MUTUAL

FAMILY BUSINESS

The summer crop production areas’ drought, lead to a price decline in the beef industry - South Africa

The suspension of beef exports and the poor outlook of summer crops which will subsequently affect the feed industry were the main drivers of the decline in prices in the beef industry.

The carcass prices started declining after May 2018 to reach a price level of just below R45.50/kg in October 2018. In the run up to the festive season prices increased marginally to R45.60/kg. Since the suspension of exports and South Africa losing its Foot and Mouth Disease free status prices declined by 2,2 % to reach R44.60/kg. The latest indications are that carcass prices may continue to decline to reach R41/kg before the end of January. Consumers should enjoy the lower beef prices in the retail sector and chain stores soon.

However, due to the strong demand for protein, we anticipate the demand for beef will increase and as a result, this will start to underpin the recovery of beef prices.

Highlights

Grains & Oilseeds

· Maize prices came under pressure this week when the latest weather forecasts showed possibility for moderate rainfall over the eastern summergrain growing regions. There’s an improvement in the rainfall conditions for most parts of the summer rainfall region in the few weeks to come.

· According to Santam Agri, there’s a 70% probability for average to above average rainfall occurring in the western parts of the country for the remainder of the season. For the eastern parts of the country, there’s a 70% probability for average to above average rainfall occurring until the end of March.

· There’s a 40% probability of light frost occurring in the Bothaville area before 10 April. Frost risk seems to be much lower towards the north western production areas such as Lichtenburg. Due to better rainfall forecasted for February and March, the risk for frost is lower. The lower temperatures on the other hand (due to rainfall) may lead to lower growth rate, which will have negative effects on the development of late planted crops.

· Very late planted summer crops, especially where plants are still young are experiencing some heat stress conditions in the central and western parts of the summer grain growing part of the country.

· Late planting of maize crops brings its own challenges and sets of risks. Improved rainfall in the coming weeks may increase the risk for insufficient growth to complete the development cycle of late planted crops due to temperature related stress. Early frost damage is a possibility.

· Cumulative weekly wheat imports as at the week ending 18 January 2019 are 184,517 tons. No imports were recorded for the week ending 18 January 2018. There will be a tariff free importing window from 1st February allowing imports of 300 000 tons free into SA. Imports into the local wheat market should gain some momentum. This may suppress local wheat prices during February.

· March wheat prices traded positively after trading negatively for consecutive sessions. Prices are expected to trade sideways in the medium term.

· Key data to look out for in the market, is the 6th wheat crop estimate which will be published by the CEC next week Tuesday.

Vegetables

· Onion prices steadily increased since mid-November. Most producers did not market in December due to holidays. Farmers are currently marketing full swing, prices are picking up from low volumes. The demand from the SADC buyers has also picked up and is expected to remain at this level in the next two weeks. On average onion prices are now trading at R38-R45/10kg bag.

Conce Moraba & Wessel Lemmer


Agricultural Economists, Absa group


ADVERTORIAL

OLD MUTUAL

CORONA VIRUS

Farming Diary

May
12

05.12.2020 - 05.15.2020

Jun
17

06.17.2020 - 06.19.2020

Jun
17

06.17.2020 - 06.19.2020

Marketing Video