Field Crops
Despite the economic challenges confronting the country, the agricultural sector continues to show resilience. The sector managed to employ more people in the first quarter of 2024, in the face of key challenges like drought, loadshedding, and deteriorating infrastructure. According to Statistics South Africa, employment in primary agriculture firmed by 6% in the first quarter of 2024 to 941 000 jobs compared to the same time last year. The main contributing provinces were the Eastern Cape, Northern Cape, North West, Gauteng, and Mpumalanga, while the Western Cape, KwaZulu-Natal, and Limpopo recorded mild declines. Agricultural machinery sales are an indicator of the sentiment of the farming sector. According to the South African Agricultural Machinery Association (SAAMA), in April 2024, 500 tractors were sold, down by 8% y/y, along with 26 combined harvesters, a strong decline of 75% y/y. Farmers are exercising caution in their buying decisions as they harvest their drought-affected summer crops. However, the outlook of the sector remains positive as farmers look forward to seeing the back of El Niño and the arrival of La Niña weather in time for the 2024/25 production season later this year. In the interim, the mood remains less upbeat for winter crops in the Western Cape, as there has been very little rainfall to date. This is another factor that needs to be monitored and it is also pressuring agricultural machinery sales.
Click here for the report: Field_Crops_Biweekly_Insights-Report.pdf (standardbank.co.za)
Livestock
Animal disease outbreaks still pose a threat to the livestock subsector of the country. As such, livestock farmers are still advised to practise strict biosecurity measures. During the first week of May 2024, the Eastern Cape confirmed the first case of the foot and mouth disease (FMD) outbreak in Humansdorp. Following forward and backward tracing of the outbreak, the Department of Agriculture, Land Reform, And Rural Development (DALRRD) has now confirmed that there are a total of three FMD outbreaks in Humansdorp in the Eastern Cape. Two adjoining properties and an associated farm, which are being handled as one farming unit. Cattle and sheep on these farms were vaccinated against FMD to reduce the viral load on the farms. The animals on the infected farms are not allowed to be moved or go to slaughter for the next six months as there is no registered FMD abattoir in the area. The only registered FMD abattoir in South Africa is in Phalaborwa, Limpopo. The government and industry are in talks regarding the establishment of an FMD abattoir within the province, should the conditions warrant it. These isolated outbreaks put the spotlight on the significance of biosecurity on livestock producing farms.
Click here for the report: Livestock_Biweekly_Insights-Report.pdf (standardbank.co.za)
Horticulture
Several key growth opportunities for the local wine industry were highlighted at the South African Wine Summit that was held this week. In terms of the demand outlook, the global wine drinking population is expected to increase at a compound annual growth rate of 3% over the next five years. This may result in an additional volumetric demand of 78 million liters of wine. It was also reported that by 2022, wine tourism had managed to fully recover from the effects of the coronavirus pandemic. In 2020, wine tourism was valued at R9.3 billion, an increase of 29% year-on-year (y/y). Wine tourism is integral to the local wine industry and represents 17.3% of the total turnover of wine cellars that crush grapes. Regarding the 2024 harvest, the national wine grape harvest is estimated at 1.09 million tons, which is approximately 7.1% lower than the small crop harvested in 2023. This could be attributed to adverse climactic events such as frost, heavy winter rainfall, floods, wind, and low summer rainfall that took place in 2023. Despite this being the smallest harvest recorded in the last two decades, winemakers remain optimistic about the excellent wine quality they expected. This excellent quality will be because of smaller berries, good ripening tempo, and moderate and dry conditions during the harvesting period.
Click here for the report: Horticulture_Biweekly_Insights-Report.pdf (standardbank.co.za)
