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Transition to La Niña will bolster production in countries in the region

  • Remote Monitoring Report
  • El Salvador, Honduras, and Nicaragua
  • February 2024
Transition to La Niña will bolster production in countries in the region

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  • Key Messages
  • Seasonal Calendar for a Typical Year
  • Projected Regional Outlook through September 2024
  • Key Messages
    • The annual lean season for the period between February and May 2024 will begin in April, leading to a seasonal decrease in food availability and access for the region's poorest households. This year, the decrease is exacerbated by 2023 agricultural season losses in subsistence production due to El Niño-related impacts, the persistence of above-average prices, and four consecutive years of shocks that have eroded the resilience of poor households. In particular, poor agricultural households in the north and the Dry Corridor of Honduras, which suffered significant crop losses in 2023, will be classified as in Crisis (IPC Phase 3), while the remainder of the region will remain in Stressed (IPC Phase 2). 
    • The lean period between June and September 2024 is expected to peak in August, as is typical, just before the start of the primera harvest, which typically begins in early September. The primera harvest is expected to be near average for the commercial crop production that supplies markets in the region, aided by the average accumulated precipitation prompted by the transition from El Niño to La Niña, which will bolster agricultural development. Despite the average accumulated precipitation, rainfall will remain erratic over time and the positive impacts will be limited due to the continued and atypically above-average temperatures. Meanwhile, subsistence farmers, who have limited resources to cope with shocks, will see a slight decrease in their yields but an increase in their reserves with the harvests. The typical seasonal decrease in prices between August and September and an increase in job opportunities with the primera harvest of staple grains will bolster access to food; most poor households in the three country-region are expected to experience Stressed (IPC Phase 2) outcomes. 
    • The variation in El Niño-Southern Oscillation (ENSO) patterns during this year, with the transition from El Niño to neutral conditions in April-May, and then to the onset of the La Niña phenomenon around August-September, implies volatility in rain forecasts. The deficit pattern observed in 2023 will likely change to an increase in accumulated precipitation in 2024; however, the erratic rainfall behavior and high temperatures will continue throughout the analysis period. Nevertheless, their impacts on domestic production are expected to be considerably lower than those reported in previous years, with some minor effects expected for subsistence production.
    • Inflation rates will remain relatively stable, as will fuel prices, in keeping with international trends. Prices of staple grains are projected to be above the five-year average, but lower compared to the atypical increases reported in 2023 driven by reduced input prices, as well as the influence of macroeconomic factors. Prices of other foods will remain high but will show some stability. As a result, access to food for poor households in the region will tend to improve slightly compared to previous years, but will fail to reach the purchasing power prior to 2020.
    ZoneCurrent AnomaliesProjected Anomalies
    Regional
    • In January 2024, the year-on-year inflation rate showed mixed trends in the region. It remained stable in El Salvador but decreased by 5 percent in Honduras compared to the variation reported the previous month. In Nicaragua, inflation slightly increased from 5.6 to 5.8 percent, maintaining Nicaragua as the country with the highest inflation of the three. In particular, food inflation shows current year-on-year values lower than those reported the previous month in the three countries monitored. 
    • In January, the wholesale price of white maize in El Salvador and Honduras fell moderately by between 5 and 9 percent, indicating a continuation of harvest flows to the market following a staggered pattern of harvests and the continuation of imports. Nicaragua, meanwhile, reports stability. In the case of red beans, following significant increases, the price remained stable in all three countries, thanks to the supply of grain to the market from the recent postrera harvests. A comparison of the prices of staple grains to the five-year average reveals continued high prices, with red beans showing the greatest variations of up to 66 percent. Meanwhile, maize prices increased between 10 and 20 percent in El Salvador and Honduras, and up to 40 percent in Nicaragua. 
    • Diesel prices varied seasonally in El Salvador and Honduras compared to December 2023, but with a decrease of between 14 and 13 percent in the year-on-year variation, respectively, thanks to the downward trend in international prices. In Nicaragua, the government continues the pricing policy implemented since April 2022. Although all three countries report high variations compared to the five-year average, these have moderated, except in Nicaragua where an increase of around 30 percent is still commonplace.
    • Remittance inflows have stabilized in El Salvador and Honduras with respect to January 2023. Meanwhile, a drop of 25 and 16 percent, respectively, is reported compared to the previous month. December is usually characterized by seasonal increases in remittances due to the end-of-year holidays. However, the decrease reported in January 2023 was less than the current one, as the accumulated remittances sent in December were greater than the previous year. There is no updated data for January 2024 in Nicaragua.
    • Rainfall has been irregular over the last 30 days, with positive anomalies in the Pacific area for all three countries. Meanwhile, the Caribbean reports a rainfall deficit close to 75 percent, especially in postrera/late-apante production areas in Nicaragua and Honduras, respectively. As a result, there will be a slight decrease in the yields of beans (the main crop for this cycle that will begin harvesting in March). 
    • Coffee harvest, which continues in high altitudes of the region, has reached its peak; however, there was a decrease in yields this year due to El Niño-related weather variations. 
    • The annual headline inflation rate will gradually continue its downward trend throughout the analysis period with values below 5 percent, given that fuel prices – which in the past had a major influence on increases – will remain stable or on a slightly downward trend. Food inflation will fluctuate by less than 10 percent compared to the previous year, although prices of food, transportation, and services are expected to remain above the five-year rolling average. 
    • The El Niño phenomenon is expected to weaken to temporarily neutral conditions, and then give rise to the La Niña phase in July-August. These conditions will add to the seasonal increase in accumulated rainfall from March onwards, with above-average values for the entire region. However, rainfall will continue to be erratic given the changing characteristics of the atmosphere during the outlook period. Temperatures, however, will remain atypically high until September. For agricultural development, the climate scenario will mean an irregular start of primera planting and average harvests nationwide. Slightly lower harvests for subsistence production are expected as the climatic conditions will favor diseases and pests, as well as focused crop losses, especially in areas prone to flooding and landslides. The start of the postrera cycle is expected to be equally irregular.
    • An apante harvest near to slightly below average will lead to a seasonal decrease in the price of beans in March-April by increasing the supply of the national and regional market. Projections show seasonal behavior for the following months, with persistently high prices for staple grains; however, these will remain below the values of the previous year and the five-year average, as production is expected to be near to or slightly below average. However, high production costs and other macroeconomic factors will remain. 
    • Remittances will remain above the five-year rolling average for the three countries. In the case of Nicaragua, migration figures are expected to continue rising during the rest of the analysis period, so the growth rate of remittances will be higher. For El Salvador and Honduras, the growth rate will maintain an upward trend but slow. 

    Seasonal Calendar for a Typical Year
    CA seasonal calendar

    Source:


    Projected Regional Outlook through September 2024

    Food security conditions in February are defined by the peak harvest of cash crops, such as coffee and sugarcane, which will provide a seasonal increase in the income of day laborers and small-scale producers. However, this year, a drop in coffee yields at all levels has been reported due to the variations in weather and other challenges (e.g., high production costs and labor shortages). Although the emphasis has been on small-scale producers, this drop in yield has affected all involved groups' economic resources, which are usually intended to cover the following months' expenses. Therefore, the impact will be evident from April onwards.

    In February, the apante/late-postrera harvest of staple grains in the northern and Caribbean regions of Nicaragua and areas on the Atlantic coast of Honduras will also be ending. This harvest is limited to just a few areas and is mostly red beans. Typically, this signals the onset of increased grain availability, as the harvest enters the market and reduces prices for one to two months. This year, the accumulated rainfall tended towards a deficit in January and February, in addition to the persistence of atypically high temperatures. However, field reports show only a slight impact on agricultural development, so the harvest, which will begin in March, is expected to be near or slightly below average levels. This will particularly bolster market supply, with the consequent moderation of prices, and the generation of income by the producers who allocate the majority for sale. 

    Rural households, located in the Dry Corridor, which were affected by the irregularity and the precipitation deficit during the agricultural cycles in 2023, will start the annual lean season a month earlier (in February), given that their reserves were lower than usual or nonexistent in the case of households that have suffered total losses. For other poor households in rural areas, this period will begin in March, be entrenched by April, and reach its peak at the end of August, just before the start of the primera harvest. During the lean season, these households will increasingly depend on food purchases at a time when prices of staple grains tend to rise due to the influence of seasonality. This year, prices will continue to be high compared to the five-year average, given that production costs remain high despite beginning to fall in 2023 and that there is still an influence of macroeconomic factors which will prolong the limited purchasing power of poor rural households. However, prices of staple grains will be lower than last year, as cash crop production performed better in 2023, so access to food will be less restricted in comparison. The seasonal decline in employment options, from March to August, also adds to the economic restrictions of poor households in rural areas, as many households rely on the income of agricultural day labor. In urban areas, employment tends to have a less pronounced seasonality, except for jobs related to the tourism industry, as Easter (between March and early April) represents an increase in income. Therefore, the households most affected by the agricultural losses of 2023, located in the north and the Dry Corridor of Honduras, plus the cumulative effect of the shocks reported in recent years on their responsiveness, will experience Crisis (IPC Phase 3) outcomes from February until the primera harvest begins (August-September). Meanwhile, the rest of the poor households in the region will see Stressed (IPC Phase 2) outcomes during the same period.

    Planting activities for the primera cycle will begin between April and May. This harvest accounts for the main production of maize in the region. The end of the El Niño phenomenon, which influenced the weather patterns of 2023, is expected this year. The transition to neutral conditions will begin precisely during the start of the rainy season in mid-April. However, changing atmospheric conditions have led to a forecast of irregular rainfall and the continuation of above-average temperatures. Given the atypically dry conditions compared to the average in the first quarter of this year as part of the effects of El Niño, the soils are low in moisture, forcing subsistence farmers to delay or stagger their planting as a strategy to minimize the risk of losses at the beginning of the primera cycle. The price of agricultural inputs remains below the values reported last year, and, in the case of El Salvador and Honduras, even below the five-year average, which will boost agricultural activities. 

    Above-average rainfall is forecast for the rest of the primera cycle (Figure 1), but erratic rainfall will persist due to the transition of ENSO conditions. These conditions, coupled with atypically high temperatures (Figure 2), could lead to a slight drop in the yields of subsistence farmers, who have fewer options to mitigate water resource limitations and the appearance of pests and diseases. As for cash crop production, the harvest that takes place in August-September is expected to be at the national average for the three countries. Access to resources, such as irrigation, means that cash crop production is more resistant to irregular weather conditions. This harvest will end the annual lean season by increasing the availability of staple grains in markets, which in turn will drive prices down – a favorable result for the entire population, including the urban population. The staggered start of planting will mean that harvest flows to the market will extend beyond the usual and there will not be much of an acute seasonal change in prices. 

    Figure 1

    Accumulated precipitation forecast, May-July 2024
    Pronóstico de acumulados de lluvia, mayo-julio 2024

    Source: NOAA/FEWS NET

    Figure 2

    Temperature forecast, April-June 2024
    Pronóstico de temperatura, abril-junio 2024

    Source: NOAA/FEWS NET

    The hurricane season begins in early June. At the moment, there are no forecasts regarding the intensity of the expected cyclonic activity. However, the occurrence of an event in the region could modify this scenario with a downturn in food security outcomes, depending on the severity and trajectory. 

    The postrera cycle, which provides the bulk of beans produced in the region, begins in September. This bolsters food access thanks to an increase in the income of households that sell part of what they produce and benefit from the increased labor demand for planting this cycle. Forecasts from economic institutions, such as the Economic Commission for Latin America and the Caribbean (ECLAC), indicate a decrease in inflationary pressures in the region and stability in employment rates, with a variation of only 1 percent. These would not result in economic growth but would prevent a further downturn in the purchasing power of the population. 

    The seasonal improvements in food availability and access from August, with no forecast of extreme events, will allow most poor urban and rural households in the region to experience Stressed (IPC Phase 2) outcomes. This suggests that they will continue to implement certain coping strategies to cover their basic food needs, such as resorting to loans or modifying the variety of food consumed. There are pockets of households that will continue in Crisis (IPC Phase 3) with fragile livelihoods, highly dependent on the sale of their labor and the food basket.

    Recommended citation: FEWS NET. El Salvador, Honduras, and Nicaragua Remote Monitoring Report February 2024: Transition to La Niña will bolster production in countries in the region, 2024.

    In remote monitoring, a coordinator typically works from a nearby regional office. Relying on partners for data, the coordinator uses scenario development to conduct analysis and produce monthly reports. As less data may be available, remote monitoring reports may have less detail than those from countries with FEWS NET offices. Learn more about our work here.

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