Summer Harvest - A Silver Lining For The Economy

The local agricultural sector is readying itself for the second-biggest grain harvest ever –if estimates are to be believed. This should br ing relief for consumers.

- Jacques Claassen

Despite the contraction that impacted negatively on the agricultural sector even before the unremitting Covid-19 crisis struck, good summer grain harvests were among the most important factors that have put this strategic and robust sector back on the road to recovery. In addition to being the driving force behind sustained production, it is welcome news for consumers and the country’s economy.

It is estimated that the GDP attributable to agriculture will receive a boost of 10% in 2020 (year-on year) – even though it’s off a low base. This is, among other things, owing to the expected excellent harvests in the summer grain regions.

This is what Prof Ferdi Meyer, managing director of the Bureau for Food and Agricultural Policy (BFAP), as well as Dr John Purchase, CEO of Agbiz, said at a recent Nedbank Agri webinar.

According to Wandile Sihlobo, Agbiz’s chief economist, the agri-economy has already improved 27.8% in the first quarter of this year compared with the last quarter of 2019. This turnaround has followed on the contraction, which was caused, among other things, by conditions of drought and problems with foot-and-mouth disease in cattle herds, which lasted for four subsequent quarters.

Good summer grain harvests

Corné Louw, a senior economist at Grain SA, summarises the expected good summer grain harvest figures (2019/2020) as South Africa harvests its second-biggest maize crop ever (consisting of an estimated 9m tonnes of white maize and 6.4m tonnes of yellow maize). The maize harvest is substantially bigger than the local annual consumption of about 11m tonnes (which leaves room for exports), he says.