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The winter grain production season started the year amidst favourable conditions and signalling good prospects for all. These prospects however, changed drastically during August and early September. Rainfall in August was below average, placing the yield potential under tremendous pressure. However, this past weekend's very hot dry conditions strained the crops even further. "The damage was clearly visible from the road," said Jannie de Villiers, CEO of Grain SA, who was in the region at NAMPO Cape last week. In some instances, the crop has decreased to below average levels in the Southern Cape and even so in the Swartland, which until recently has appeared beautifully.
The fact that there was already financial pressure from previous drought seasons, is of great concern to Grain SA. Producers needed a good season to start servicing debts and achieve a positive cash flow. As winter grain prices are normally close to import parity levels, the drought is not expected to have a positive influence on prices for producers. Thus, producers are not compensated with better prices if yields decrease. The unpredictable weather conditions make crop cultivation very difficult in South Africa. "It is precisely as a result of the difficult weather conditions that Grain SA pleads for State aid to make crop insurance more affordable, thereby ensuring food security for everyone," de Villiers said. Urgent rain is needed to prevent disaster.
Agricultural businesses and financial institutions that Grain SA is engaging with, have requested producers to contact them early to make new plans.