56 Crop Maize (RR) Maize (min tillage) Soybean (conventional) 1) INCOME Yield target (t/ha) 6,50 6 2 SAFEX: Estimated price R4 200 R4 200 R7 400 Deductions R442 R442 R212 Net farm gate price R3 758 R3 758 R7 188 GROSS INCOME (R/ha) R24 427 R22 548 R14 376 2) VARIABLE EXPENDITURES Seed R4 389 R3 761,41 R2 113,78 Fertiliser R7 238,40 R6 426,90 R4 165,69 Lime R759 R252,75 R759 Fuel R961,97 R1 273,28 R1 153,23 Reparation R1 222,19 R695,88 R1 400,20 Crop protection R1 996,13 R1 392,72 R1 226,05 Input insurance R512,97 R438,17 R280,33 Grain hedging R1 365,75 R1 147,49 R179,01 Harvest insurance R998,17 R895,24 R1 006,32 Interest on production (R/ha) R1 239,53 R1 038,10 R783,08 TOTAL VARIABLE EXPENDITURE (R/ha) R20 683,10 R17 321,92 R13 066,69 TOTAL FIXED COST (R/ha) R1 817,73 R2 217,07 R2 149,16 TOTAL COST (R/ha) R22 500,83 R19 538,99 R15 215,85 3) GROSS MARGIN (R/ha) R3 744 R5 226 R1 309 4) NET MARGIN (R/ha) R1 926,2 R3 009 -R840 Table 6.4: Budgets for the Eastern Highveld. Source: Grain SA Figure 6.4 (on page 57) provides a visual summary of the data presented in Tables 6.3 and 6.4. It compares the gross margin (golden bars, representing variable costs only) and the net margin (turquoise bars, representing both variable and fixed costs) across the different crops. Overall, the figure indicates that summer grain production in the eastern regions of the country remains largely profitable, except for soybeans in the Eastern Highveld Region. The anticipated higher commodity prices for the upcoming season are expected to further support returns. The figure also highlights that maize, soybeans and sunflowers show stronger profitability in the Eastern Free State Regions. When looking at the Eastern Highveld, grain sorghum and maize are more profitable. 6.2.3. Irrigation There is a significant difference when the cost per hectare between dry land and irrigation is compared. The difference in variable cost is mainly due to the higher plant density under irrigation increasing both seed and fertiliser costs. Except for the price increases in input costs, an irrigation producer is suffering under the constant increase in the cost of, for example, electricity, water and pivot maintenance. Table 6.5 and 6.6 (on page 58 and 59) show the estimated production costs for irrigation crops for the Northern Cape and Limpopo for the 2024/2025 production season. If the SAFEX price and the estimated budgeted input costs are realised, it appears that an irrigation producer would be able to cover their variable costs when planting maize and sunflowers, but the picture looks quite different if the fixed cost component is considered. INCOME AND PRODUCTION COST
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