Weekly neWsWrap BFAP Baseline Agricultural Outlook 2019 to 2028
ABOVE:
Maizeproduction
is increasingly
beingaffectedby
changingweather
conditions.
fwarchive18 farmer’sweekly 30 August 2019
Foodinflationis settoincrease
intheshorttermduetovarious
macroeconomicindicators,which
meansthatSouthAfricanconsumers
canexpectfurtherfoodpriceincreases.
ThiswasaccordingtotheBureau
forFoodandAgriculturalPolicy’s
(BFAP)baselinereportforthe
period 2019 to2028,whichwas
launchedinPretoriarecently.
Thereportshowedthattheaverage
‘thrifty,healthyfoodbasket’for
April 2019 costR2524/monthfora
familyoffour,andR814/monthfor
a singleadultmalehousehold.
Thesamebasketfora familyof
fourcostR1843/monthin2013.Thebasketincludedstarch-richstaple
foods,animalprotein,dairy,fruit,
vegetables,fatsandoils,andlegumes.
Theincreaseinfoodinflation
from 2018 to 2019 wasprojected
tobe5%,whilea further6%was
expectedbetween 2019 and2020,
bringingthebasketuptoa projected
costofR2655/monthin2020.
Foodstuffscontaininganimal
proteinmadeupthelargestproportion
ofthethriftyfoodbasketat30%,
followedbyvegetablesat19%,starch-
richstaplefoodsat17,9%,liquid
dairyat13,3%,andfruitat8,7%.
Thebaselineoutlookstated
thattobeabletoaffordthethriftyfoodbasketinAprilthisyear,a
householdoffourpeople
requireda monthlyincomeof
R7212/ month, if 35% of total
expenditure was allocated to food.
The baseline report showed that the
main driver of staple food inflation for
the coming year would be maize meal,
with prices expected to increase 11%.
Dr Johann Kirsten, director of the
Bureau of Economic Research at
Stellenbosch University, said at the
launch that real consumer spending
was growing faster than real per
capita income, which meant people
were incurring debt to finance
household expenses. – Pieter DempseySA consumers set to face further food price pressure
TheBureauforFoodand
AgriculturalPolicy(BFAP)
recentlypresenteditsSouth
AfricanBaselineAgricultural
Outlookfortheperiod 2019
to2028,whichprovidesa
comprehensivesummary
oftheagriculturesector
anditsprojectedgrowth
overthenextdecade.
Speakingatthereport’slaunch
inPretoria,DrTracyDavids,
managerofcommoditymarkets
andforesightatBFAP,presented
theoutlookforsummercrops,
suchasmaize,andoutlined
thechallengesfacedbythe
industryduringthepastfew
years,aswellastheprojected
growthoverthenext 10 years.
“Locally,whitemaizefaces
increasingcompetitionfrom
regionalmarkets[overthe
longterm].Asa result,wesee
exportsdecliningovertime,
andwealsohavedomestic
factorsinfluencingthat.
“Asourdomesticconsumers
areunderpressure,thelong
declineinpercapita maize
consumption has stopped, with
consumers shifting back to a
maize-based diet,” she said.
Combined with an expanding
population, this will support
growth in white maize consumed
as food, with relative prices
dictating that a smaller share of
white maize will be consumed as
animal feed by 2028 relative to the
past three years, according to the
report. In addition, demand for
meat products, both domestically
and in the export market, was
expected to support substantially
faster growth in the demand for
yellow maize and soya bean than
was the case for white maize.
Area trends during the
coming decade also reflected
this continued shift in demand,
the report said, with the white
maize area continuing to
decline by a total of 17% by
2028, relative to the 2016 to 2018
base period. By contrast, the
area planted to yellow maize
and soya bean would continue
to increase, expanding by 15%
and 68% respectively over
the 10-year period to 2028.
Davids said weather conditions
had increasingly influenced
production, and it was
anticipated that structural shifts
in production would be seen overMaize production faces
uncertain, volatile future
the next 10 years. The ongoing
drought conditions experienced
this year in certain production
regions, such as North West and
the Free State, continued to have
a negative impact on the financial
position of many farmers.
Davids added that the long-term
prospects for the international
maize market were fairly
uncertain as prices had remained
flat for a long time, while the
extreme wet weather conditions
in the US this season had resulted
in crop estimates being revised
downwards. – Pieter Dempsey