South Africa has not had three consecutive favourable agricultural seasons in a long time. But the 2021-22 season is likely to be an additional period of a prolonged cycle of favourable weather conditions and good agricultural activity in South Africa. The 2019-20 and 2020-21 production seasons were characterised by ample rainfall, which supported agricultural activity in the country and led to large harvests.
The typical cycles are two seasons of large agricultural output followed by a notable decline on the back of dryness. The only periods in the recent past that had three successive years of conducive weather conditions and a large crop harvest were in the 2007-08, 2008-09, and 2009-10 production seasons. In this period, commercial maize production was more than 12-million tonnes each year, averaging 12.5-million tonnes a year.
A sharp decline in the maize area, specifically in the 2005-06 production season, characterised the seasons prior. This was primarily caused by dryness and resulted in a lower harvest of 6.6-million tonnes in 2005-06 and 7.1-million tonnes in the 2006-07 production season. Other key summer crops such as sunflower seed and soybeans registered similar dips in production, especially in the 2006-07 season.
For maize, 2019-20 and 2020-21 was the first time in history where South Africa’s maize yields have surpassed 15-million tonnes in two successive seasons — 15.3 million tonnes in 2019-20 and 16.4-million tonnes in the 2020-21 season. Other subsectors of agriculture, mainly horticulture, also recorded large production volumes in essential fruits such as citrus. The deciduous fruits and wine grapes also showed an improvement in output from the previous years’ decline.
As we approach the summer crop planting season from October, the weather forecasts show strong prospects of above-normal rainfall in the 2021-22 summer season. At the end of July 2021, the South African Weather Service indicated that South Africa could experience another La Niña this summer, albeit weaker than in 2020-21. This would build on relatively higher soil moisture across the country following the 2020-21 season’s La Niña rains.
On 12 August, the International Research Institute for Climate and Society echoed a similar sentiment as the South African Weather Service, expecting a weak La Niña for the coming season. Importantly, from September 2021 to January 2022, the La Niña probabilities are more than 50%. These expectations suggest that the summer crop growing areas of South Africa could receive above-normal rainfall during this period.
Another important dynamic of a La Niña is that it could bring dryness for regions such as South America. We witnessed it in 2020-21 and the downward revisions on Brazilian and Argentinian grain production forecasts because of poor yields. A repeat of this scenario would mean the preliminary forecasts of a large crop in these regions that the United States Department of Agriculture and the International Grains Council have recently released would most probably be cut in the coming months.
Under such a scenario, the global grains prices would not fall notably in the coming months as I had previously expected (although they will probably remain at lower levels than at the start of 2021). Such price dynamics would spill over into South Africa’s grain market, as had been the case for much of 2020 and this year. The price levels above the long-term average would be an incentive for farmers to maintain an area planning of just over four million hectares for summer crops as in the previous years (although there might be a switch between various crops depending on profitability).
Farmers were already optimistic about the production conditions, as evident from the tractor sales. In the first seven months of this year, South Africa’s tractor sales were 26% ahead of the corresponding period in 2020, with 3 934 units. But sales in much of last year were negatively affected by lockdown restrictions, so the base is slightly distorted. Still, 2020 was also a good year in South Africa’s tractor sales, so surpassing it means we are witnessing some good momentum this year. In 2020, the tractor sales amounted to 5 738 units, up by 9% from 2019, supported by the large summer grains and oilseeds harvest in 2019/20.
The difficulty farmers are contending with this season is rising input costs. In July, agrochemicals such as glyphosate, atrazine, acetochlor were respectively up by 151%, 30% and 24% from July 2020. Fertilizer products such as ammonia, urea, di-amonium phosphate and Potassium Chloride were up by 184%, 104%, 115% and 98%, respectively, from July 2020.
This means the profitability margins of this year will be squeezed, and farmers should work on receiving higher yields to thrive. The rainy weather outlook presents a conducive environment for potentially higher crop yields in the 2021-22 season.