Agriculture outlook impacted by bleak climate conditions
Dire climatic conditions remain a threat to Namibia’s agricultural outlook this year.
As a result of the looming drought, further increases in the number of livestock marketed to avoid losses to drought and reduce pressure on grazing land are expected.
Rangeland conditions continued to deteriorate in March as dry conditions persist, Agribank said in its first quarter economic outlook for 2023.
Inconsistent patterns
According to the bank, the growth of the agriculture sector was 2.6% in 2022, compared to 1.3% in 2021.
"The improvement of the sector was driven by a moderate increase in the livestock farming and fishing sub-sectors that recorded growth of 1.2% and 2.3%, respectively."
However, the crop sub-sector recorded a negligible growth rate of 4.5% in 2022 compared to 5.5% in the prior year.
"Furthermore, the sector is expected to remain at low levels during 2023 and 2024, mainly due to inconsistent rainfall patterns and broadly unchanged fishing quotas in 2023."
Surges and dips
Agribank said the number of cattle marketed in 2022 stood at 183 000, an increase of 4.3% compared to 2021.
"The increase in the number of cattle marketed emanated from better grazing conditions in 2022, coupled with improved beef prices."
It said the marketing of small stock surged by 36% to 707 894 in 2022, compared to 519 167 in the prior year.
Beef and sheep producer prices, meanwhile, remain elevated, with beef export prices averaging N$60.15 per kg in 2022, compared to N$52.51 per kg in 2021.
Sheep producer prices averaged N$60.56 per kg in 2022 and upward, compared to N$58.89 the prior year.
Contrary to rising beef and sheep producer prices, weaner prices declined by 6% to N$37.6 per kg in 2022, compared to N$39.89 per kg in 2021.
Agribank said the price decline could be attributed to increased demand for weaner exports to South Africa.
External factors
"We observed an increase in the controlled crop production to 33 918 tonnes in the fourth quarter of 2022 compared to the 23 596 tonnes recorded in the corresponding quarter of 2021."
Due to the impact of the Ukraine war on the crop markets, an increase in the price for white maize was observed to N$7 228 per tonne in the fourth quarter of 2022, compared to N$4 819 per tonne in the same period of 2021.
Domestic production of wheat increased to 24 084 tonnes in the fourth quarter of last year, compared to 17 789 tonnes in the preceding year.
Similarly, for white maize, the price for wheat skyrocketed to N$ 8 105 per tonne in last year's fourth quarter compared to N$6 771 the previous year.
Be prepared
Farmers are advised to prepare for worst-case scenarios, ramp up diversification strategies, and adopt production technologies to mitigate the impact of climate change and unleash opportunities in the food system.
Agribank added that unfavourable climatic conditions remain a key risk to the performance of the agriculture sector and the bank in terms of collection and loan book growth.
Hence, there is a need for Agribank to continuously explore opportunities for innovative financing and non-financial support services for its clients.
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As a result of the looming drought, further increases in the number of livestock marketed to avoid losses to drought and reduce pressure on grazing land are expected.
Rangeland conditions continued to deteriorate in March as dry conditions persist, Agribank said in its first quarter economic outlook for 2023.
Inconsistent patterns
According to the bank, the growth of the agriculture sector was 2.6% in 2022, compared to 1.3% in 2021.
"The improvement of the sector was driven by a moderate increase in the livestock farming and fishing sub-sectors that recorded growth of 1.2% and 2.3%, respectively."
However, the crop sub-sector recorded a negligible growth rate of 4.5% in 2022 compared to 5.5% in the prior year.
"Furthermore, the sector is expected to remain at low levels during 2023 and 2024, mainly due to inconsistent rainfall patterns and broadly unchanged fishing quotas in 2023."
Surges and dips
Agribank said the number of cattle marketed in 2022 stood at 183 000, an increase of 4.3% compared to 2021.
"The increase in the number of cattle marketed emanated from better grazing conditions in 2022, coupled with improved beef prices."
It said the marketing of small stock surged by 36% to 707 894 in 2022, compared to 519 167 in the prior year.
Beef and sheep producer prices, meanwhile, remain elevated, with beef export prices averaging N$60.15 per kg in 2022, compared to N$52.51 per kg in 2021.
Sheep producer prices averaged N$60.56 per kg in 2022 and upward, compared to N$58.89 the prior year.
Contrary to rising beef and sheep producer prices, weaner prices declined by 6% to N$37.6 per kg in 2022, compared to N$39.89 per kg in 2021.
Agribank said the price decline could be attributed to increased demand for weaner exports to South Africa.
External factors
"We observed an increase in the controlled crop production to 33 918 tonnes in the fourth quarter of 2022 compared to the 23 596 tonnes recorded in the corresponding quarter of 2021."
Due to the impact of the Ukraine war on the crop markets, an increase in the price for white maize was observed to N$7 228 per tonne in the fourth quarter of 2022, compared to N$4 819 per tonne in the same period of 2021.
Domestic production of wheat increased to 24 084 tonnes in the fourth quarter of last year, compared to 17 789 tonnes in the preceding year.
Similarly, for white maize, the price for wheat skyrocketed to N$ 8 105 per tonne in last year's fourth quarter compared to N$6 771 the previous year.
Be prepared
Farmers are advised to prepare for worst-case scenarios, ramp up diversification strategies, and adopt production technologies to mitigate the impact of climate change and unleash opportunities in the food system.
Agribank added that unfavourable climatic conditions remain a key risk to the performance of the agriculture sector and the bank in terms of collection and loan book growth.
Hence, there is a need for Agribank to continuously explore opportunities for innovative financing and non-financial support services for its clients.
[email protected]
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