South Africa can potentially produce its second largest maize harvest yet, if the first crop estimate for 2017 becomes reality.
The first official estimate from the National Crop Estimates Committee (CEC) predicts a maize harvest of 13.918 million tons for 2017. This is almost 80% more than the 2016 harvest and the second largest harvest ever. In 2014, a record harvest of 14.982 million tons were harvested by South African maize farmers.
This first official crop estimate is substantially larger than the average market expectation of just over 13 million tons, earlier this year.
The increase in the crop estimate is attributed to a 35% expansion in the area planted, the CEC says, but mainly due to a dramatic increase in the production expectations compared to last year.
The crop estimate for white maize is 8,313 million tons, 144% more than last year. The estimate for yellow maize is 5,605 million tons, an increase of 28% since last year.
The release of the report also led to a sudden move in Safex prices. Contracts for white maize for delivery in July fell more than 4% to a two year low of R1 817 (US$140) per ton on 1 March, a day after the estimates were released.
This after the price was as high as R5 000 (US$382.97) by the middle of 2016.
According to agricultural economist Johan Willemse, farmers should not be too concerned about price decreases. He says the bigger harvest is good for the country’s economy, as well as for rural areas.
Willemse says the larger harvest, especially for maize, and lower prices, mean a possible decrease of between 20% and 25% in feeding costs for intensive livestock farmers in the 2017/’18 marketing year.
“This will greatly help to stabilise industries after the drought the past three years,” Willemse says.