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5
March 2018
It's going to be a tough season
o
ptimise your profitability and not necessarily your
yields. Is that where we now find ourselves with regards
to grain production? Agricultural conditions generally are
good, although the season is late and, in some areas, has
not even started. The Western Cape is experiencing one
of its worst droughts ever.
Our visits to the grain production areas of our country have high-
lighted the large diversity of our climate. From good crops in the
east, to scorched early maize in the west to a parched Western Cape
– that is what we are confronted with.
The prevailing conditions in the world looks dismal with regards to
the recovery of prices in the near future. After the food price crisis in
2008, agricultural technology took off with such a bang that the sup-
ply totally overshadowed demand. Stocks have never been so high
and prices remain under pressure. When will the demand catch up?
Political optimism is allowing the rand to strengthen and does not
lend support with prices. We cannot always live with just the relative-
ly cheaper inputs! The world remains hungry, but our maize prices
still exceed export parity – and as a result our silos stay full and our
bank accounts empty. In times like these, more than ever, producers
must focus on their profitability: Costs and prices.
Grain SA cannot influence the prices, but focuses on keeping the
market as transparent as possible and endeavours to ensure that no-
body manipulates it. On the cost side we try to publish prices widely
so that producers can negotiate and we monitor the quality to ensure
that everyone receives what he/she paid for. To optimise profitabil-
ity, you must have in place the best people knowledge on both sides
of your business.
In 2016/2017 I wrote about the new era that was dawning. A type
of after-the-free-market-era. I encountered the green shoots thereof
around the braai fires during the regional meetings. Producers are
busy re-organising themselves into buying and marketing groups
and so endeavour to better position themselves.
Some are erecting their own fertiliser plants and have already started
processing their own grain products. It is almost as if the first shots
in a new era of launching a new type of ‘co-operative movement’
are being fired. It is precisely this type of innovation that makes the
South African producers such unique die-hards. Well done guys, let
us have your stories with which we can encourage each other in or-
der to remain sustainable. I was also encouraged when some of our
new era commercial farmers at the end of their complaints about the
poor services of the state, started complaining about the transport
differential. Yes, that word! It was clear indication to me that each
of them was the same as any other commercial producer.
I wish to close this month’s editorial with an encouraging thought:
During all our discussions at regional meetings about land reform it
was remarkable to me that the same type of emotional arguments
used previously were not used again.
Together with the concerns about the populistic comments, a piece
of realism surfaced: That we ourselves will have to devise plans
to take this matter forward in a responsible manner. The opinions
and recommendations of commercial producers are definitely
not weighed in terms of the hectares we own, but (rightfully or
wrongfully) in accordance with the percentage votes the opposi-
tion parties in Parliament have. It impedes our efforts to influence
decisions.
Nevertheless, I am experiencing the development of a greater
openness for our views – if we sincerely and together search for
solutions and not one-sidedly endeavour to defend or shoot down
every argument.
All the best for the season ahead, it is going to be tough.