Agri Trends 24 November 2017 Grains, Livestock, Fibre & Veggies

La Nina development will hopefully improve summer rainfall conditions.

Production conditions deteriorated in the summer crop production areas in November due to below expected rainfall, very low temperatures, hot and windy conditions as well as very low temperatures, as was seen with the frost damage occurrence in the eastern Free State, causing damage to soybean crops. Weather conditions restricted soybean crop plantings during its optimal planting dates. Therefore the industry anticipates a shift to sunflower seed production because plantings can still take place until December and early January. The La Nina development is in full swing, and will hopefully bring about good rainfall in mid to late summer, alleviating the current weaker than expected rainfall conditions.

Highlights

Grains

• Planting dates for soybeans and groundnuts have expired; therefore we anticipate a shift to more sunflower plantings. Sunflower and maize planting can still take place in the Eastern parts of Free State. Maize till end of December and sunflowers until the first part of January.
• With 90% of the wheat harvesting process completed, the WC is likely to produce lower crop sizes as was previously estimated. The industry  anticipates a lower wheat production of approximately 500 000 tons to 600 000 tons.

Veggies

• Should the drought continue well into the next year (winter), borehole supplies could get depleted, Sandveld (WC) potato producers may have to reduce their crop significantly by approximately 30% (reduced supplies from the Sandveld, could support higher prices in the other regions. In the short term, we anticipate normal seasonal prices to take place
• Growers in the Western Cape have planted fewer onions than normal; some have not even sown any onions this winter. Producers prefer to use the water for permanent crops. Western Cape production is expected to be lower mostly due to the drought. The WC normal production hectares are normally ±2500 hectares. Currently figures show that only 2000 hectares were planted, of which only 50% is expected to realize due to drought.

Poultry

• According to monthly food prices reported by Statistics South Africa, egg prices (1.5 Dozen) increased by 7% during the period June to October 2017, whilst prices for (2.5 Dozen) increased by 8% during the same period. Egg prices for 2.5 dozen eggs meanwhile increased by 6% from September 2017 to October 2017. Egg prices are following an upward trend, following recent bird flu outbreaks in some regions, leading to shortages of eggs.
• Poultry remains the least expensive protein meat, which may encourage consumer demand.
• Underlying support from the beef industry is supporting the poultry market.
•    Exports of chicken products have been negatively affected by Avian Influenza outbreak.
• Feeding margins have improved on the back of lower maize prices this season.

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