2017/2018 Income and Cost Budgets
Area coverage
Table 1 and Table 2 indicates the area of coverage and include the dryland and irrigated crops. The source of data and collaborators are also included.| Area | Dryland crops | Source and Collaborators |
|---|---|---|
| KwaZulu-Natal | ||
| Bloedrivier | Maize and soybeans | GSA, BFAP and Individual farmers |
| Mpumalanga | ||
| Middelburg / Trichardt | Maize, soybeans and grain sorghum | GSA, BFAP and Individual farmers |
| Ermelo | Maize and soybeans | GSA, BFAP and Individual farmers |
| Eastern Free State | ||
| Reitz region | Maize, soybeans, sunflower and dry beans | GSA, VKB, BFAP and Individual farmers |
| Western / Northern Free State | ||
| Wesselsbron | Maize | GSA, Senwes and BFAP |
| Bothaville (high potential) | Maize | GSA, Senwes and BFAP |
| Western / Northern Free State | Maize, soybeans, sunflower, groundnuts and grain sorghum | GSA, Senwes and BFAP |
| North West | ||
| Koster | Maize, soybeans and sunflower | GSA, NWK, BFAP and Individual farmers |
| Lichtenburg | Maize, soybeans, sunflower and groundnuts | GSA, NWK, BFAP and Individual farmers |
| Area | Irrigated crops | Source and Collaborators |
|---|---|---|
| Northern Cape | ||
| GWK area | Maize, soybeans, groundnuts and sunflower (oil) | GWK, GSA and BFAP |
| KwaZulu-Natal | ||
| Bergville | Maize and soybeans | GSA and Individual farmers |
| North West | ||
| Britz / Northam / Koedoeskop | Maize, soybeans, sunflower and sorghum | GSA, NWK and Individual farmers |
| Limpopo | ||
| Loskop Irrigation Scheme | Maize and soybeans | GSA and Individual farmers |
Yield assumptions
Figure 1 and Figure 2 reports the yield assumptions for dryland and irrigated crops. The assumptions represent target yields and crop input allocation based on achieving the stipulated target yields. The respective target yields were determined in a round table discussion with industry experts.
Crop price assumptions
On an annual basis, the Bureau for Food and Agricultural Policy (BFAP) presents an outlook of agricultural production, consumption, prices and trade in South Africa over a 10-year period. The information presented is based on assumptions about a range of economic, technological, environmental, political, institutional, and social factors. The outlook is generated by the BFAP system of models. A number of critical assumptions have to be made for baseline projections. One of the most important assumptions is that normal weather conditions will prevail in Southern Africa and around the world: therefore, yields grow constantly over the baseline as technology improves. Assumptions regarding the outlook of macroeconomic conditions are based in a combination of projections developed by the International Monetary Fund (IMF), the World Bank and the Bureau for Economic Research (BER) at Stellenbosch University. Baseline projections for world commodity markets were generated by FAPRI at the University of Missouri. Once the critical assumptions are captured in the BFAP system models, the Outlook for all commodities is simulated within a closed system of equations. This implies that, for example, any shocks in the grain sector are transmitted to the livestock sector and vice versa. Therefore, for each commodity, important components of supply and demand are identified, after which an equilibrium is established through balance sheet principles by equalling total demand to total supply.
Figure 3 illustrates the commodity price assumptions for white maize, yellow maize, sorghum, sunflower and soybeans that were used in the summer crop budgets for the 2017/2018 production season. The sensitivity analysis in the respective crop budgets makes provision for variation in price and yield and indicates the gross margin under each price and yield combination.
