106 / 138
102
INPUT AND PRODUCTION OVERVIEW
Table 9
(on page 100) further illustrates the breakdown of input costs to produce soybeans and sun-
flower. Given the input costs (fixed plus variable costs) as shown in
Table 9
for soybeans at the given
Safex price, a yield of approximately 1,58 t/ha in the Eastern Free State and 1,89 t/ha in the Eastern
Highveld is required to break even. Oilseed prices are currently trading at relatively high levels, which
makes the profitability situation for these crops very favourable.
Graph 23
(on page 99) shows the information as illustrated and calculated in
Table 9
in figure for-
mat.
Graph 24
shows a gross margin (blue bar – variable costs only) comparison as well as a net
margin (red bar – variable + fixed costs) comparison between these crops. In summary, the graph
shows that summer grain cultivation in the eastern parts of the country is largely profitable and that
the expected higher commodity prices for the upcoming season generally support profitability. In
the figure, it is noticeable that the profitability of sunflower and soybeans is better than that of maize.
Although sunflower is planted on a small scale in the Eastern Free State, the profitability picture looks
relatively good. The profitability situation for oilseeds is therefore better than that of maize.
Irrigation
When the cost per hectare between dryland and irrigation cultivation is compared, there is a significant
difference. The difference in variable costs is mainly due to the higher plant density under irrigation
resulting in an increase in both seed and fertiliser costs.
Except for the increases in input costs, an irrigation producer is suffering under the constant increase
in the cost of, for example, electricity, water and pivot maintenance –to name just a few.
Table 10
(on
page 101) shows the estimated production costs for irrigation crops for the Northern Cape and Limpopo
for the 2022/2023 production season. According to calculations, the variable costs to produce maize
under irrigation in the Northern Cape for a yield target of 14 t/ha is a shocking R43 820/ha, while it
is R35 770 for a yield target of 12 t/ha in Limpopo.
If the Safex price as well as the estimated budgeted input costs (only variable costs) realises, it seems
as though an irrigation producer would be able to cover his variable costs. According to these figures,
producers will be able to cover their variable costs for maize, but the picture looks quite different if the
fixed cost component is considered. Given the fixed costs, maize production under irrigation is particu-
larly challenging and must achieve above-average yields.
MARGIN COMPARISON FOR SUMMER GRAIN CROPS IN THE NORTHERN
CAPE AND LIMPOPO FOR IRRIGATION FOR THE 2022/2023 SEASON
IRRIGATION
MAIZE
IRRIGATION
SOYBEANS
IRRIGATION
MAIZE
IRRIGATION
SOYBEANS
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
-2 000
-4 000
GROSS MARGINS (VARIABLE COSTS ONLY)
NET MARGINS (TOTAL COSTS = VARIABLE + FIXED COSTS)
R
NORTHERN CAPE: IRRIGATION
R6 692
R4 718
R10 670
R13 132
-R2 751
-R885
R2 351
R6 012
LIMPOPO: IRRIGATION
Disclaimer: The information in these budgets has been obtained from various sources, and Grain SA does not guarantee
the accuracy and/or completeness and accepts no liability for this. Any prices or levels contained in these budgets
are preliminary and indicative only and do not represent bids or offers. These indications are provided solely for your
information and consideration.