Summary on gross margins

Figures 4.1-4.4 provide a summary on gross margins performance of dryland and irrigated crops over the period from 2018 (adjusted to account for actual yields) to 2022 (projected).

Across the 24 dryland crops in 7 agro-ecological regions, an average gross margin of R5,088 per hectare is projected for the 2020/21 production season, approximately 21% lower compared to the 2019/20 production season, however 65% higher compared to the 2018/19 production season.

For dryland crops, direct costs are projected to move relatively sideways, driven mainly by a decrease in the cost for fuel and fertilisers. High crop prices coupled with higher yields over most parts of the summer crop producing regions in 2019/20 have resulted in robust gross margins levels across all dryland crops. For the 2020/21 season, it is projected that on average, maize gross margins will decrease from 2019/20 levels (+-33% lower). Oilseeds is projected marginally lower, however, substantially higher opposed to maize (sunflower lower by 5% and soybeans by 11%). For irrigated crops, maize gross margin is projected to decline by an average of 35% in 2020/21 (relative to 2019/20 levels). The cultivation of soybeans under irrigation is projected to outperform maize and sunflower in the 2020/21 production season.