South African farmers typically till their land from mid-October in the eastern regions and mid-November in the western regions. The crops that South African farmers plant in each of these regions differ. The eastern areas are primarily yellow maize and soybeans, while the western regions are predominantly white maize and sunflower seeds.
But this year, the plantings have been slightly slower than usual as we haven’t received meaningful rains yet. If you talk to farmers in rural regions of Limpopo or outside eKomani in the Eastern Cape, they will tell you that the impact of the mid-summer drought 2024 is still lingering in their area. The weather conditions have been quite dry.
We have even heard some agricultural analysts speculate that the 2024-25 agricultural season may as well be a continuation of the misery of the 2023-24 season, where the heatwave from February 2024 and drier weather conditions led to major crop losses. South Africa’s 2023-24 summer grains and oilseeds harvest fell by 23% year-on-year to 15,39 million tonnes. This encompasses maize, sunflower seed, soybeans, groundnuts, sorghum and dry beans. This was because of the El Niño–induced drought. The drought was more severe in Southern Africa, with Zimbabwe and Zambia, amongst others, losing over half of their maize harvest.
We have received various forecasts suggesting that in the 2024-25 summer season, we are moving towards the La Niña weather phenomenon. This weather phenomenon typically has the opposite impact of an El Niño in Southern Africa; it brings above-normal rainfall.
Since we have not yet received the higher rainfall, we suspect it is a matter of timing, but most forecasts point to prospects of favourable rainfall this 2024-25 season. This implies that the recovery period may be in sight, and the farmers are also optimistic. For example, on October 29, South Africa’s Crop Estimates Committee indicated that South African farmers intend to plant 4,47 million hectares of summer grains and oilseeds in the 2024-25 season. This is up mildly by 1% from the previous season.
The planting intentions for white maize are at 1,58 million hectares (up 1% y/y), and yellow maize is at 1,06 million hectares (down 2% y/y). The overall maize planting intentions are at 2,64 million hectares (up 0,2% y/y), which aligns with the five-year average area. The planting intentions for soybeans are at 1,2 million hectares (up by 0,2%), the largest area on record. The sunflower seed planting intention is 540k hectares (up 2,1% y/y), slightly below the average planting of 554k hectares. The planting intentions for groundnuts are 40k hectares (down 2,9% y/y), sorghum at 54k hectares (up 28% y/y), and dry beans at 45k hectares (up 14% y/y).
I think there are three primary drivers of this optimism. First, the relatively higher grains and oilseed prices on the back of the poor harvest in the past season provide an incentive for increased planting in the 2024-25 season.
Second, the season starts with relatively better-priced input costs than the past season. For example, in rands terms, most fertilizer product prices were down by roughly 10% year-on-year in September 2024 compared with the previous year. Since fertilizer accounts for approximately a third of the grain farmers’ input costs in South Africa, such a price decline significantly improves farmers’ finances.
Also worth noting is that in rands terms, herbicide prices were down by around 20% in August 2024 compared with the same period last year. The prices of insecticides were down by roughly 15% year-on-year in August 2024. Since herbicides and insecticides comprise about 10% of grain farmers’ input costs, declining prices help with operational costs. The stronger domestic currency, combined with the decline of these prices in the international market, is a significant factor behind the decrease in domestic prices. The recent easing in fuel prices at a time of high usage during planting is another positive factor regarding the operating conditions in the farming sector.
Lastly, the prospects of a La Niña-induced rainfall in the 2024-25 summer season is another additional factor to be optimistic about the agricultural outlook in South Africa. Indeed, most regions of the country have not received any meaningful rains, but it is still early, and we suspect there could be a late start to the season. The comforting observation is that the major weather forecasters continue to see the likelihood of the La Niña event this season.
For example, on October 15, the Australian Bureau of Meteorology noted
“The ENSO Outlook is currently at La Niña Watch, meaning there remain some signs that a La Niña may form later in 2024”.
The Columbia Climate School at Columbia University sees the probability of La Niña occurrence at over 60% between October 2024 and January 2025. From February, the prospects slow to below 50%, with normal weather conditions dominating throughout the summer season.
An important point to underscore here is that “normal” weather conditions in a summer season imply regular rainfall, not drought or “El Niño”. Therefore, the normalizing weather prospects from February should not be a significant worry.
Admittedly, the South African Weather Service (SAWS) has been more cautious than its peers to make a bold call on where we are regarding the weather prospects. On October 5, in its monthly Seasonal Climate Watch, the SAWS stated
“The El Niño-Southern Oscillation (ENSO) is still in a Neutral state and is predicted to weaken further. Current predictions indicate the development of a La Niña state during the start of the summer season; however, there is still significant uncertainty in the predictions. It is advised to monitor the ENSO system during the start of the summer season, as it may change the rainfall outlook for the summer rainfall regions if and when the La Niña materializes.”
Overall, these are intentions to plant, not an actual area. The preliminary area planting will only be out at the end of January 2025. Over the coming weeks, my focus will be on rainfall conditions and the progress of plantings across the country. I remain optimistic that crop production in South Africa and Southern Africa may recover, but the season will be delayed than usual.