The past season is one that summer grain producers want to forget as soon as possible. They faced very dry conditions in summer, and in some areas the crops failed completely.

The total summer grain crop for the 2023/24 season is currently estimated at 15,4 million tons, down 23% on 2022/23. The 2024 wheat crop is estimated at 1,94 million tons, down 4% on 2023.

The current maize crop is estimated at 12,7 million tons, down 22% on the previous season. Soya bean production for this season is 34% lower, while sunflower production is 12% lower.

The white maize price did increase by 50% from July 2023 to July 2024, partially compensating farmers for the lower production, while the price of yellow maize only increased by 15%. Wheat prices are at the same level as a year ago, while soya bean prices have remained at the same level.

Farmers in some areas had frost damage to their wheat crops, and meteorologist Johan van den Berg warns that the risk of frost damage has increased as South Africa now experiences frost later in the season.

Lower beef prices

Livestock producers also had a bad year. Beef and weaner prices are lower than a year ago. Several outbreaks of foot-and mouth disease (FMD) had a negative impact on prices. The outbreak of FMD in the Humansdorp area in the Eastern Cape also hurt the dairy industry.

Lamb and mutton prices are also lower than a year ago. The main reason for the lower beef and mutton prices is the lower consumer demand for such foods. Consumers are under pressure from higher administered prices, especially fuel and energy, high unemployment, and below-inflation wage increases.

While the decrease in interest rates provides breathing space to some consumers, it will not benefit those with unsecured loans or loans from non-financial institutions.

Better days to come

There are some signs that farmers may encounter better days in 2025. Meteorologists tells us that we may have reached a turning point in the current dry cycle, and that rainfall may return to normal levels in 2025.

While consumer confidence is still low, there are signs of improvement. Since mid-2024, beef prices have trended slowly upwards in spite of increased slaughtering.

The decrease in interest rates, the promise of further cuts and slightly lower fuel prices, as well as a slowdown in total inflation, may result in higher consumer demand next year.

There are also positive signs of a recovery of the South African economy. Mining production has increased as global activity improves. International markets reacted positively to the American presidential election, with a stronger dollar resulting in a weaker rand.

A weaker rand implies higher domestic prices for imported products and improved income for exporting industries like fruit and wool.

Countering disease outbreaks

Livestock farmers suffered from the effect of the various FMD outbreaks. Luckily, it seems as if the talks about a national animal identification and traceability system have resulted in some action.

While the registration and geographical identification of the different entities in the livestock value chain probably is the correct way to start, it does not solve the problem.

The problem is not with farms or abattoirs, which are static, but with individual animals being moved around. We seriously need a legally enforced animal identification system like those that have been in force in European countries for many years, or like the scheme that is in operation in Namibia.

Agriculture Minister John Steenhuisen has already targeted the dismal performance of the Onderstepoort Biological Products (OBP) vaccine factory. The private sector is capable of and willing to produce all the vaccines currently allegedly produced by OBP and only needs approval from government to do so. I am confident that the vaccine situation will improve soon.

In general, the Government of National Unity seems to be doing a number of positive things currently, and the environment for South African agriculture will also improve in 2025.

Thus, a more favourable season, slightly better consumer confidence, higher disposable income and improved farming infrastructure add up to better conditions than in 2024.

Dr Koos Coetzee is an independent agricultural economist.