The United States Department of Agriculture’s (USDA) Pretoria office is a key institution, and it is worthwhile to keep an eye on their views.
It recently released an updated view of South Africa’s 2022/23 maize production season, leaning strongly towards the views of South Africa's Crop Estimates Committee (CEC).
In this week’s podcast, agricultural economist Wandile Sihlobo, provides more colour on these dynamics and their impact on grain prices.
The USDA forecast the country's commercial maize plantings at 2,60 million hectares in the 2022/23 season, broadly aligned with the CEC, whose data points to a possible area of 2,59 million hectares. This area is slightly below the 2021/22 season of 2,62 million hectares.
Still, it is well above the long-term average. Considering the USDA's yield forecast of 5,70 tonnes per hectare, South Africa's maize harvest could amount to 15,00 million tonnes in the 2022/23 season, marginally down from 15,33 million tonnes of the 2021/22 season. Still, this will be well above the annual consumption of 11,80 million tonnes and maintains South Africa as a net exporter of maize. Under such conditions, South Africa's maize exports could be above 3,00 million tonnes.
The usual export destinations for South Africa include Taiwan, Japan, Vietnam, South Korea, Botswana, Italy, Namibia, Eswatini, Mozambique, Spain, Lesotho, Angola and Zimbabwe, amongst others. These markets, especially the offshore ones, will likely remain dominant in South Africa's export list.
The countries whose imports could decline, depending on how widespread the favourable rains are, are the southern African countries. In the La Niña years, the whole region receives higher rainfall which should support crop production. The major issue that farmers in some southern African countries could struggle with is the higher input costs.
In the 20221/22 season, the likes of Tanzania saw a decline in fertilizer usage because of higher prices, which reflected in lower yields in some regions. With the fertilizer prices still over 20% higher than last year, although having softened from the months after Russia invaded Ukraine, the current levels are still relatively high and costly to farmers.
Regarding the subsistence farmers, the USDA forecasts an area of 300,000 hectares, down from 379,000 hectares in the previous season. With a yield expectation of 2,00 tonnes per hectare, subsistence farmers' production could amount to 600,000 tonnes in the 2022/23 season. This is also down from 657,000 tonnes in the previous season. Still, this is a decent harvest and will help cover the household needs in various communities.
