September 9, 2005

USDA: South Africa grain and feed monthly update 2005

South Africa's corn crop planted in 2004 and currently being harvested is now estimated at 12.4 million tons, 27% bigger than the crop planted in 2003. 

The area planted increased by only 4.3% to 3.3 million hectares but the yield increased. The crop on commercial farms (12.2 million tons) is expected to produce a new record yield of 4.2 tons per hectare.

The abundant crop is reflected in the producer price drop which is the cumulative effect of the big crop and the large carry over which reached 2.9 million tons of old season stocks by the end of April 2005. 

With total annual consumption at about 8.7 million tons, the oversupply situation is clear. 

Exports are picking up due to the low prices and depreciated Rand, coupled to strong demand in Zimbabwe and the return of Iran and Japan to the market. 

Even if this demand continues and total exports jump to 2.3 million tons, it would still not have a major effect on the oversupply situation and the end of April 2006 carry over could reach 4.3 million tons. 

Farmers are considering cutting back the area to be planted this year while looking at ethanol production as the long-term solution.

US$1 = Rand 6.45 (08/31/05)

For the full USDA report, click here.