The drastic increases in producer input costs will result in even fewer potatoes being planted this year. Potatoes SA expects 1 000ha to be withdrawn from potato production this year, and that’s in addition to the 3 000ha withdrawn last year when abnormally large volumes of potatoes on the market floor lowered prices. While fertilisers and pesticides are the primary expenses that determine potato producers’ production costs, the weakening rand, escalating oil price and Eskom’s tariff increase has also put severe upward pressure on costs.
“The continual increase in input costs is delivering warning signals to sustainable and continued potato production in South Africa,” said Pieter van Zyl, Potatoes SA’s industry information manager. In March 2008, it cost the farmer R75 000 to R100 000 to produce 1ha of potatoes under irrigation. Since then, the price of diesel has escalated a further R1,30/â„“ and electricity tariffs have increased by 14%.
“If everything is taken into account, the production cost of potatoes has increased by 25% in the past six months and even more over the past year,” said Van Zyl. “Although it’s expected that the production cost increase will be under 25% in the next six months, it will still be impossible for a large number of producers to produce potatoes viably at the current price of less than R20 per 10kg bag,” he explained. “The survival of potato producers depends on the average potato price increasing to about R30 per 10kg bag.” – Robyn Joubert
Yellowwood thieves nailed with heavy sentences
Thieves of South African indigenous timber were issued a stern warning when six men where sentenced to long prison terms for the illegal felling of 86 mature yellowwood trees in the Gongqo-Gongqo State Forest near Umzimkhulu, KwaZulu-Natal, in 2001. The Circuit High Court in under the presiding judge Justice J Miller, sentenced brothers, Morné (35) and Pierre (39) Terblanche and their father Victor Terblanche (65), all from the province’s Mooi River area, to an effective eight years imprisonment for the crime.
The Terblanches’ three accomplices, Wilson Ntlabathi (66) of the Malenge Tribal Authority (MTA), the MTA’S secretary, Eric Sithole (58) and treasurer, Siphiwe Satywa (68), were sentenced to an effective five years of jail time. The court noted that although the value of the logs could be estimated, the damage to the forest environment was incalculable. “Some of the yellowwoods cut down by the accused had diameters of up to 2m wide and were between 300 to 400 years old,” added Rod Potter, chairperson of the KZN Wildlife Crime Working Group.– Lloyd Phillips
Shape up or ship out, economists warn
Farmers suddenly find themselves in an increasingly appreciated industry, concluded economists and political analysts at a meeting in Buffelspoort in the North West on 21 May, to discuss the current political and economic landscape.
Political analyst Dr Jan du Plessis said that five years ago government rarely gave farmers a second thought, because food supply was high and prices were low. “Now people are staring to take notice,” he said. But Prof Herman van Schalkwyk, Free State University’s dean of Natural and Agricultural Sciences, predicted interest rates would increase by another 100 basis points before the end of the year.
Hence the message was clear – to survive, farmers need to sharpen their pencils. Van Schalkwyk said that while most farmers had already bought fertiliser for the coming season, planning for the next one would be imperative because of rising input costs. “Those farmers who plan well now will survive,” he said, adding that high maize prices translated into high meat prices. “To remain productive, livestock farmers need to cull those cows not calving.
A 60% calving rate is just not good enough.” number of farmers voiced their concern that increased interest rates would cause many of them to suffer and go bankrupt. H owever, Dawie Roodt, Chief economist at the Efficient Group, said that while interest rates were uncomfortable now, the sooner they were sufficiently raised the better. While Roodt said he understood the threat some farmers face, he was adamant that such an increase was very necessary for long-term growth.
Van Schalkwyk concluded that the dairy and pork sectors were starting to increase their margins, while poultry was coming under increasing pressure from high input costs. – David Steynberg
China snatches monopoly on fertiliser
With no end in sight to price hikes on food, feed and fertilisers, the future seems dismal for a global human population growing by 200 000/day and 73 million per year. The situation is made even worse by better living standards across the world, which have drastically increased consumer preference for animal products, as predicted. And all this in the middle of an energy crisis.
The Chinese have already doubled their annual meat consumption to 50kg/person. As about 8ha of maize are needed to raise a beef carcass, every available field will have to be effectively used to produce food and feed. But, as Dr Gert van der Linde of the Fertiliser Society of SA (FSSA) pointed out, the Americans are growing more nitrogen-hungry maize for biofuel at the expense of soya. “On the other side of the globe, China – one of the biggest exporters of urea – has slapped a 135% export tax on most fertilisers, effectively stopping exports and causing an immediate imbalance in the supply and demand of fertilisers on world markets,” he said. “The price of urea, for example, climbed US$200/t within a month.”
Local farmers have to wrestle with the problem that the price of fertilisers is largely connected to international prices. “The SA fertiliser industry imports about 70% of its raw materials for the manufacture of products,” Dr Van Der Linde noted. “While we are reasonably self-sufficient in phosphates, we can supply only about 50% of our nitrogen needs and have to import all our potassium. Domestic prices are further influenced by high shipping costs and the exchange rate.”
Pointing out that 98% of the world’s sulphur comes from gas and oil, he explained that sulphur is needed to produce sulphuric acid which, in turn, is used to dissolve phosphate rock to produce phosphoric acid – the basis for all phosphate fertilisers. “Over the past 12 months, the international price of phosphoric acid climbed from US$450/t to US$2 000/t,” he explained. “Ammonia comes from natural gas and as the price of gas rises, so does the price of ammonia.”
Dr Van der Linde said he thinks the only hope in the shorter term is that the price hikes will slow down. “The shortage of nitrogen can be satisfied reasonably quickly and the market could even stabilise by 2009. But we might have to wait until 2011 for improved supplies of phosphorus and potassium, which are largely the products of mining.” r Van der Linde also warned that incorrectly calibrated machines can spread up to 20% too much fertiliser and suggested that farmers store their fertilisers in the prescribed way to prevent losses. – Roelof Bezuidenhout Contact the FSSA on (012) 349 1450.
Now’s the time to save soya bean seeds
Grain SA has implored soyA bean producers to save seed from their current harvest to plant in October/November. This is because it expects favourable conditions will see more farmers wanting to expand soya bean production towards the end of the year, leading to a shortage of seeds. “In relation to maize, the price of soya beans for the coming season is in favour of soya beans,” said Nico Hawkins, Grain SA’s manager of industry services, “The high price of fertiliser favours soya beans, as soya binds its own nitrogen and has a lower fertiliser requirement than maize.”
Hawkins went on to say that Grain SA wanted to forewarn farmers not to deliver all their seed, in case there’s a shortage at planting time. “There’s currently no crisis, but we would like to see an increase in the area planted to soya beans,” he said. The current area planted to soya beans is 174 400ha, with an estimated crop of 302 000t. “We have produced far more than that in past. The highest area planted was in 2005/06 with 240 000ha, but there’s room for more,” said Hawkins. – Robyn Joubert
