••••
T RADE N E W S
Increase earnings from maize through
FARM FEEDLOT
Table 1: Budgeted gross margins at a net maize price of R1 700 per
ton.
THE PROFITABLE CULTIVATION OF
MAIZE IS UNDER PRESSURE DUE TO
INCREASED SUPPLY LEVELS AND
EXPECTATIONS ARE THAT IT WILL
NOT CHANGE DURING THE 2017/18
PRODUCTION SEASON.
JOHAN DU TOIT
MANAGER: SENWES AGRI-ECONOMIC SERVICES
M
aize cultivation forms the main crop in
the production systems of most summer
grain producers (>65%). A drastic downscaling is
not always practically possible and the alternative
application of at least a portion of the crop should
be investigated.
The finishing off of weaners in a typical farm
feedlot situation potentially offers such an alterna
tive for crop farmers with cattle farming interests.
According to the Senwes Agri-Economic Ser
vices Bureau Data, the average overhead (fixed)
production costs, depending on the area, amount
to between R600/ha (Southern Free State and
Northwest) and R1 000/ha (Western and North
ern Free State). A farming extension in respect
of which the gross margin is lower than indicated
above, will therefore not be able to make a suffi
cient contribution to the payment of fixed pro
duction costs and other farming expenses such as
instalment payments and private expenditure.
According to the information in Table 1, the
required gross margins at the planning assump
tions referred to in the different areas would seem
to be unlikely, which justifies the consideration of
an alternative.
Based on the information which was available
at the time of the writing of this article, the reali
sation of the required net break-even maize price
will be difficult.
> CONTINUED ON PAGE 18
18
OCT/NOV 2017 • SENWES Scenario
Southern
Free State Western
Free State Northwest
3.5* 4.5 3.5
Planning yield (t/ha)
Rand per hectare
Gross income 5 950 7 650 5 950
Direct production cost 5 385 6 780 5 661
565 870 289
Gross margin (R/ha)
*Please note that the long-term average maize yield for the Southern
Free State amounts to less than 3t/ha according to Senwes Bureau
Data.
Table 2: Technical data (farm feedlot)
Starting mass (kg) 235
Ending mass (kg) 438
Standing period (days) 110
Final carcass mass (Kg) 259
Feed intake as % of average mass 3%
% Maize in ration 73%
Weaner price (R/kg) 30.00
Carcass price (R/kg) 45.00
Dressing (%) 59%
Table 3: Economic analysis (farm feedlot)
R/Animal
Ending value 11 642
Starting value 7 050
Cost of feed * 2 382
Processing and mortality 501
Transport costs 120
Financing costs
350
Margin above specified costs (R/calf )
1 239
Price margin (1 473)
Feed margin 3 336
*Maize at opportunity cost (R1 700/t as derived from average
Jul/Sept/Dec 2018 Safex prices)
Table 4: Calculated value addition to maize by farm feedlot
Southern
Western
Free State Free State Northwest
Planned yield (t/ha) 3.5 4.5 3.5
Number of calves per hectare 4.33 5.59 4.34
Gross margin (R/ha) 5 331 6 885 5 349
Margin realised per ton of maize 1 523 1 530 1 528
Required net break-even maize
price (R/t) 2 420 2 368 2 383
SAFEX yellow maize prices
(R/t) as at 7/9/17 for: Jul 8
R2 105 Sep 8
R2 147 Des 8
R2 236
Value addition