Despite earlier reduction in output in the Mpumalanga areas and reports that some of the maize in western areas has been downgraded to WM2, the total maize crop of 15.54 million tonnes is 38% higher year-on-year.
In the oilseed complex, the sunflower estimate came in 2.6% higher from the previous estimate at 785,910 tonnes while groundnuts saw 2.3% contraction at 64,800 tonnes. Although the soybean estimate was unchanged month-on-month, the harvest estimate is still 8% higher year-on-year at 1.26 million tonnes, which bodes well for local supply of soymeal.
For the winter crops, the first crop estimate came in by a massive 32.4% year-on-year at 2.64 million tonnes of wheat (74%), barley (19%), canola (5%), and oats (2%) as good rains and snow boosted crop prospects in the producing areas of the Western Cape.
Wheat production is forecast up 27.8% year-on-year at 1.96 million tonnes which will help reduce the import bill as South Africa is still a net importer.
The barley forecast jumped 46.4% y/y with the two smaller crops, canola and oats increased by 29% and 175.8% respectively year-on-year. The seasonal weather outlook is still positive and should see a good finish to the crop season.
Interestingly, grain prices especially maize have been unseasonably strong and will encourage farmers to plant more in the new crop season amid favourable production conditions with the La Nina weather pattern in the forecasts. This however poses upside risk to food inflation which has recently picked up pace in the July update at 4.6% year-on-year in July from 4.5% year-on-year in June 2020.
The data released by the Crop Estimates Committee on 27 August shows that South Africa's 2020/21 wheat, barley and canola production could increase by 28% y/y, 46% y/y and 29%, respectively, to 1.96 million tones, 505 215 tons and 122 820 tons.
Barley is mainly produced in the South Western Cape under dry land conditions. Two-thirds of our barley is produced in the areas around Caledon, Riviersonderend, Bredasdorp, Napier, Swellendam, Heidelberg and recently, patches of the Swartland region too.
Barley is a short-seasoned, early maturing crop. About half of the world’s crop is used as livestock feed, while the rest is used for human food and for malting. Most beer is made from malted barley.
Malt barley is the perfect combination of starch enzymes, flavours and aromas for brewing and distilling. Some of the principal characteristics used to define malting quality are protein, malt extract, enzyme activity and beta-glucan.
Feed barley is used as animal feed. A rule of thumb is that good malt barley is good feed barley, but the reverse is not true. In general, malt barley commands a premium over feed barley, but yields less.
The world’s barley production reached 129,9 million tons (USDA, 2018) during the 2018/2019 season, which is lower than the previous season. The production trend line over the past twelve years is almost stable on a level of 140 million tons, but in the previous three seasons production fell below this trend.
Barley is grown in about 100 countries worldwide, with three regions, namely the European Union (mainly Spain, Germany and France), the Russian Federation and Canada, responsible for more than half of the world’s barley. Canada is the top malt barley producer.
Most of the growth in demand for malt barley and malt during the next five years will be in countries with rapidly expanding beer production. Africa is the largest nation in this regard with a 21% annual growth rate. . In South Africa, barley is mainly planted for malting purposes as there is no significant feed market for barley due to the oversupply of maize. Barley differs from most other agricultural commodities in that there is only one major barley buyer in South Africa, the SA Maltsters; they supply their major stakeholder, South African Breweries Ltd, with malted barley. Barley producers mostly had a guaranteed market, but lately are exposed to price risk – the price of barley is now linked to the wheat price.
Barley farmers will have to find alternative markets for this year due to Covid 19-
