Photo: FW Archive
Plum production has become economically unviable with the majority of farmers suffering a loss over the past two seasons.
Pietman Wessels, agricultural economist at Frudata, said during the Hortgro Technical Symposium recently held in Somerset West in the Western Cape, that average net farm income from plum production fell from R63 601/ha in 2014 to losses amounting to R13 918/ha in 2020 and R8 714/ha in 2021.
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Average total costs, over this time, increased from R181 670/ha to R309 290/ha. A significant difference, however, exists between the financial state of average and top farmers, which Wessels said showed there was still room for improvement.
Net farm income of the top third plum producers amounted to R155 042/ha in 2014, dropping to R119 160/ha in 2020 and R75 412/ha in 2021, while their total costs increased from R205 921/ha in 2014 to R342 647/ha in 2021.
On average, they exported 4 810 cartons/ha in 2014, 3 675 cartons/ha in 2020 and 5 529 cartons/ha in 2021, earning an average farm gate price of R8 189/t in 2014, R11 869/t in 2020 and R7 083/t in 2021.
The average group, in contrast, exported 3 510 cartons/ha in 2014, which reached 2 209/ha cartons in 2020 and 4 016 cartons/ha in 2021, with farm gate prices averaging around R6 904/t in 2014, R9 149/t in 2020 and R6 373/t in 2021.
Wessels said that the situation showed some deep fault lines in the industry, with the logistical challenges associated with COVID-19 and the war in Ukraine exacerbating the situation and accelerating the fall: “The main problem is that the industry is shoving all their plums into the market regardless of the time, destination, the quality, and size of fruit.”
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He said farmers should use a stricter set of criteria when planting new varieties, and align planting decisions with the market. “Talk to your exporter about their capacity to export more fruit, the market potential for specific varieties, and consider the impact of time, size and market placement on the income potential of the variety.”
Farmers also needed to guard against a situation where risks for claims are high. “We have seen the traditional market chaining us down on price, because of quality problems experienced with a few cartons of fruit, which meant that even our better quality fruit sold at discounted prices.”
Along with this, the industry needs access to new markets to alleviate peaks experienced in the UK and the EU.
Annelie Haumann, managing director of Stems Fruit, said exports had increased from 9 million cartons during the 2019/20 season to 15,5 million this season: “The industry has seen a steep growth, with the COVID-19 pandemic robbing marketing agents of an opportunity to build the market and a loss of the wholesale industry, which accounted for a lot of our larger fruit.”
She said there were probably a million to two million excess cartons on the market: “We can probably manage the situation, but this should not be the sole responsibility of exporters. Farmers, from their side, should not send small and inferior fruit to the market and need to cut back on marginal varieties.”
She added that farmers should not push a variety with a 40t/ha potential to produce 50t/ha as that will affect the quality and the shelf life of plums, which was becoming increasingly important because of the longer times it took to ship fruit.
Hubert Leclercq, managing director of RuBisCo, said that the average time it took to ship plums to the dock has increased from 23,35 days to 30,73 days in 2020, with 35% of the cartons arriving only after 35 days.
