<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
SIMON BROWN: I\u2019m chatting now with Loffie Brandt. He is the executive for agriculture at Absa AgriBusiness. Loffie, appreciate the early morning time.<\/p>\n
Farming has always been tough. I\u2019m not a farmer, but the farmers I chat to say it\u2019s just a tough business always; there has always been a challenge to it.<\/p>\n
But in recent times, particularly around climate change, it has become frankly even harder. With predicted weather patterns almost the only certainty is that there will be something uncertain happening. It has become tougher to be a farmer.<\/p>\n
LOFFIE BRANDT: Morning, Simon. Thank you very much. That\u2019s 100% correct. I think if you look at the weather patterns just lately, what\u2019s been happening in the Western Cape I think is a clear example of how quickly things can change. To your point, predictability becomes a lot more difficult. If it was possible to predict it accurately, it would have been a lot easier to navigate these uncertainties \u2013 and especially these severe weather conditions.<\/p>\n
But the fact that it is so unpredictable makes it difficult to plan and to prepare yourself for what might be coming.<\/p>\n
Read:
Western Cape mops up after the storm
Why businesses are underestimating SA\u2019s climate threat<\/p>\n
SIMON BROWN: That\u2019s actually a great point. Farming is in many ways about trying to predict what is hard to predict, but it\u2019s a case of which crop you are planting, when you plant, and how much fertiliser? Obviously if you put in fertiliser, you get better yields. What is the break-even on that? It is around trying to predict what is hard. And it has just become harder in sort of knowing what to plant. Where do we plant it? These become much harder decisions.<\/p>\n
LOFFIE BRANDT: Yes, you are 100% correct. But if you look at how our farmers operate, they more or less have a plan of what they need to do and how they plant their fields every year. There might be small changes here and there according to whatever they anticipate can potentially happen.<\/p>\n
But I think once they start the process, they will adapt \u2013 even when certain weather conditions happen. For example, as soon as they see more rain than what has been anticipated, they will tend to try to put down more fertiliser because that will potentially increase their yield. So there is a bit of movement.<\/p>\n
I think over the years farmers have actually learned how to how to deal with these sorts of uncertainties and to navigate them in order to optimise the production.<\/p>\n
Read:
Opportunistic price gouging amid rising fuel prices in SA
Fuel crunch from war threatens South African wheat, corn crops<\/p>\n
SIMON BROWN: I get you. It is that adaptability to the unpredictable. And of course then we\u2019ve got the war \u2013 I was just chatting with Citadel around that \u2013 and the impact to farmers in inputs. Energy, diesel, is a significant expense on the farm.<\/p>\n
And then of course there are the fertilisers, as you mentioned. Urea coming through the Strait of Hormuz is currently not coming through the strait. So fertiliser and energy are putting significant upward pressure on the costs.<\/p>\n
LOFFIE BRANDT: Yes. I think probably the most talked about topic currently is the fact that we\u2019ve seen a significant increase in energy prices and fertiliser prices \u2013 and how that\u2019s going to play out.<\/p>\n
We\u2019re sitting here at Nampo, and the discussions are specifically around grain and oilseed markets. Stock levels are fairly high. Prices are all under pressure and at fairly low levels.<\/p>\n
Globally, stocks are also at fairly high levels, which makes the upward potential in the short-term future fairly limited.<\/p>\n
And then you now need to produce with a potential increase of a 40% higher fertiliser cost, and a 50% \u2013 if not more \u2013 higher fuel cost. So margins are under pressure. Again, I think those are some of the uncertainties.<\/p>\n
But coming back to how we navigate this, what we\u2019re currently looking at is to see how this thing will play out going into the future. I think in South Africa and the southern hemisphere we are in a more comfortable position in that we will be starting our harvest time soon and hopefully we can see price increases in the near future. That\u2019s the one thing.<\/p>\n
The other thing is we do have a big crop on land. So there will be additional sales that can potentially happen which can potentially soften the impact of these threats.<\/p>\n
But going into the next season, I think that\u2019s where the big challenge comes. If prices are still under pressure and we still need to buy fertiliser and fuel at these elevated higher levels, I think that\u2019s where the challenge is going to come.<\/p>\n
SIMON BROWN: And that just goes back to where I started. Farming is tough. This just makes everyone\u2019s job harder, which is perhaps hard to run and to comprehend.<\/p>\n
A last question. For the consumer, we might not be seeing the impact right now, but yes, a crop gets planted. It then gets harvested. It then gets used in whatever method \u2013 and eventually reaches my table. There is a lag effect to the impact on consumers, but in many cases we know it is coming.<\/p>\n
LOFFIE BRANDT: Definitely, Simon. I think if you look at the impact on the consumer, it is basically twofold: a sort of inflation that happens before, sort of \u2018on farm\u2019; and then the portion after the farm gate \u2013 packaging, increased transport and logistic costs. Those things are feeding in immediately.<\/p>\n
The sort of inflationary pressure that will come as a result of higher production costs might take a bit more time to feed into the system.<\/p>\n
But if the uncertainty in the Middle East drags on, it is definitely going to hit us very, very soon.<\/p>\n
Read:
SA farms face El Ni\u00f1o drought risk on top of Iran war
South Africa wheat plantings seen at 11-year low as costs surge
Spare a thought for SA farmers<\/p>\n
SIMON BROWN: Yes. And we will see it on the table.<\/p>\n
We\u2019ll leave it there. Loffie Brandt, executive for agriculture at Absa AgriBusiness, appreciate the early morning.<\/p>\n
#Field #fork #Farmers #rising #risks #costs<\/p>\n","protected":false},"excerpt":{"rendered":"
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