Brief agricultural outlook for 2019 

Agbiz head of Agribusiness Research Wandile Sihlobo has compiled a brief
agricultural outlook for 2019. He highlighted the following take-home messages.

• The South African beef sector will be under pressure in 2019 due to rising feed costs, as well as potentially slowing exports on the back of a foot-and-mouth disease outbreak.
• From a consumer perspective, the beef industry challenges will, however, have positive short-to-medium term benefits as slowing exports would translate into an increase in domestic supply and, in turn, slow meat price inflation.
• Our initial maize production estimate of 12.2 million tonnes will not materialise, the crop will most likely be lower due to a potential decline in area planting, as well as prospects of lower yields in late-planted areas.
• Soybean harvest will most likely be lower than the 2017/18 production season due to similar factors as maize, which is a decline in area plantings and expectations of poor yields in some areas.
• Sunflower seed typically surprises by doing well in seasons that are characterised by prolonged dry spells, as farmers tend to shift from maize to sunflower seed plantings in late-rain seasons. Therefore, sunflower production projections remain uncertain, at least until planting data is received.
• The weather will continue to play a key role in the South African agricultural markets in the next three months. Thereafter, the focus will shift to winter crop producing areas. The near-term precipitation prospects are constructive (see page 6).
• South Africa's rice imports will increase in 2019 driven by an uptick in consumption.
• The tough production conditions in the grains and oilseeds subsectors will most likely add upward pressure on consumer prices, but we do not expect a notable uptick in headline food price inflation, as lower meat prices will somewhat overshadow the potential upswings.