Forecasts of an El Niño occurrence in the 2023/24 summer season do not necessarily equate to a bad agricultural season.
The upcoming season of possible below-normal rainfall follows a rare consecutive four years of heavy rains that have improved soil moisture and natural grazing veld.
This means there is a natural cushion for agricultural activity even if the rains are below average (typically about 500mm) in SA this summer. However, it will be necessary for the rain that does fall to occur in critical periods, such as the seed germination and pollination stages of growth, which are essential for crop growing.
If this were to occur it would not be the first time SA was in such a fortunate position. The summer of 2018/19 was marked by an El Niño event, but there was rainfall at just the right times and SA ended up harvesting decent crops, with commercial maize at 11.2-million tonnes, soya beans at 1.2-million tonnes and sunflower seed at 678,000 tonnes.
Other field crops and horticulture also achieved good yields that year. Notably, the 2018/19 season was not preceded by a favourable four-year period of good rainfall that improved overall soil moisture. The current position is therefore better than the last El Niño period.
Various weather forecasters share the view in terms of the likelihood of the occurrence of an El Niño. In the past few months I have reflected in this column on forecasts by the SA Weather Service and Columbia University’s International Research Institute for Climate & Society, which all point to a higher probability of El Niño occurring towards the end of this year. The latter placed the odds at more than 80% at the start of June.
Expected El Niño in 2023/24 summer does not necessarily foretell a bad harvest
The Australian Bureau of Meteorology also put out a statement recently that the “outlook has been shifted to El Niño ALERT. This means that while the El Niño-Southern Oscillation (Enso) is now neutral, there is about a 70% chance of El Niño forming in 2023”. It said this is “roughly three times the normal chance of an El Niño”.
Under such conditions the agricultural sector and agribusinesses must plan for a changing operational environment from the conducive four years that supported growth in the sector. Still, this weather outlook should not necessarily imply less investment in agriculture or elevated risk.
Such trepidation is inevitable as people still remember the harsh drought of the 2015/16 production season, when maize output fell to 7.8-million tonnes and soya beans to 742,000 tonnes, while the sunflower seeds harvest, at 755,000 tonnes, was boosted by farmers switching white maize hectares to sunflower seed and cotton in the western regions of the country.
That season the livestock industry, various field crops and horticulture all suffered major losses. Importantly, the 2015/16 season was preceded by a drier production period in 2014/15, and soil moisture was low in various regions. The fall in yields was therefore unavoidable. Moreover, the years before were not exceptionally wet, and production conditions were generally challenging.
This means teams in the agricultural credit desks at various organisations that use the recent drought periods as a reference for what could transpire in the coming season would be misguided, and could result in a far more risk-averse approach than production conditions on the ground warrant.
The financiers and service providers in the sector could perhaps start to worry if we get another drought in the 2024/25 season. Such a scenario would then be on the back of a less wet season, and soil moisture reserves would have been depleted in 2023/24. But this is not in the forecasts at this point. The communication from all major weather forecasters has focused on the upcoming season.
Also worth noting is that farmers’ production methods have changed over the past few years with the adoption of no-till farming and other climate-friendly practices, which all aim to conserve soil moisture and support production.
Overall, the SA agricultural sector faces a slightly drier 2023/24 summer season. But this should not scare investors or financiers away.
• Sihlobo is chief economist at the Agricultural Business Chamber of SA and a senior fellow in Stellenbosch University’s department of agricultural economics.
