agri benchmark

Cash Crop Conference 2012

How does South African Maize production

compare to the USA?

2

1) Presentation objective

2) An overview on South African farms

3) An overview on the farm situated in Iowa, United States

4) The benchmark of physical data:

• Yield

• Cropping systems

• Cost comparisons

• Productivity indicators

Presentation Overview

3

• To illustrate how South African farms compare to the

USA

• Although several variables could influence production

conditions, the objective is to only illustrate a basic

benchmark with the assumption that everything else is

held constant

• The benchmark could give an indication whether SA

farms are competitive internationally on a per ton

Presentation objective

Overview on South African farms

South African maize

farms in agri

benchmark network

ZA1200NW

ZA600KZN

ZA1600EFS

ZA1700WFS

ZA1800NC

ZA1600NFS

Overview on South African farms

Farm name & province Hectares (Arable) Crops Tillage system Soil Type Rainfall Total kW

ZA1200NW, North West 1 024 ha Maize & Sunflower Intensive Sandy loam 550mm 606

ZA1700WFS, Western Free State 1 680 ha Maize & Wheat Conservation Sandy loam 450mm 898

ZA1600NFS, Northern Free State 1 490 ha Maize & Sunflower Conservation Sandy loam 450mm 1095

ZA1800NC, Northern Cape (double crop irrigation) 1 818 ha Maize & Wheat No-till Sandy loam 250mm 914

Overview: Farm situated in Iowa, United States

Source: Wikitravel, 2012

North Central Iowa

• Farm consist of 688 hectares arable

land

• Corn & soybean production (50:50)

• Conservation tillage approach with

reduced stubble breaking and mulch

seed

• Strategy: Increase marketing skills &

capture more of the value of the bio-

fuels industry

• Soils: Loam - Silt clay loam

• Climate: Continental with an annual

rainfall of 888 l/m2

• Land cost: $20 000 (R150 000) per ha &

rent, $670 (R5 025) per ha

• Average field size: 60 Acres (24.2 Ha)

• Average distance of fields: 6km

Iowa is non-irrigated; often with wet spring and

fall season.

8

• Yield

• Cropping systems

• Graph on seed & fertilizer application

• Plant protection

• Cost comparisons

• Productivity:

• Nitrogen

• Seed application

Benchmark: SA & USA

Yield

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

200

9

201

0

201

1

Av

era

ge

200

9

201

0

201

1

Av

era

ge

200

9

2010

201

1

Av

era

ge

200

9

201

0

201

1

Av

era

ge

200

9

201

0

201

1

Av

era

ge

201

1

US700IA ZA1200NW ZA1700WFS ZA1700WFS ZA1800NC ZA1600NFS

To

n / H

a

Irrigation

Irrigation

10

• Cannot make a simple yield comparison by not

looking at the drivers behind yield, therefore:

• What are the key drivers behind yield?

• Respective production system / practise

• Seed and fertilizer management

• Plant protection

• Availability of water

Benchmark: SA & USA

Seed comparison

0.00

50.00

100.00

150.00

200.00

250.00

300.00

0

2

4

6

8

10

12

14

16

US700IA ZA1200NW ZA1700WFS ZA1600NFS ZA1800NC

US

D /

ha

t / h

a &

kg

/ h

a

Seed cost (USD/ha) Yield (t/ha)

The 2012 large-scale, on-farm trials, will be taking place with

approximately 250 growers on up to 10,000 acres across the

Western Great Plains, the product's target launch area.

The drought-tolerant trait is part of Monsanto's Yield and Stress

collaboration in plant biotechnology with Germany-based BASF.

Pioneer is integrating the Plenish™ high oleic soybean trait into elite

Pioneer® brand Y Series genetics in a broad range of maturities and

agronomic packages, providing the right product for the right acre,

and market.

Keep the stability, lose the trans fat

Client Focused GMO

Traits

http://www.vistivegold.com/Pages/Home.aspx

http://www.plenish.com/default.aspx

Fertilizer application

164

65 85

120

318

0

100

200

300

400

500

600

700

800

900

0

50

100

150

200

250

300

350

US700IA ZA1200NW ZA1700WFS ZA1600NFS ZA1800NC

US

D /

ha

kg

/ h

a

N P K Fertilizer cost (USD/ha)

US dryland nitrogen application much more

than SA dryland farms. Fertilizer cost per

hectare is cheaper in the US. The amount of

Nitrogen applied in the Northern Cape is

substantially higher than in other areas.

Combined annual fertilizer sales in Hamilton and Hardin counties

0

10

20

30

40

50

60

70

80

90

1985 1990 1995 2000 2005

Year

Fer

tiliz

er s

ales

(m

illion

pou

nds)

Nitrogen

Phosphorus

Potassium

Plant protection

64.35

25.23

71.48

63.73

67.57

0

10

20

30

40

50

60

70

80

US700IA ZA1200NW ZA1700WFS ZA1600NFS ZA1800NC

US

D /

ha

Plant protection (USD/ha)

2 Herbicides applications

Production systems & machinery

0.79

0.55

0.67

1.00

0.73

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

1400.00

1600.00

0.00

0.20

0.40

0.60

0.80

1.00

1.20

US700IA ZA1200NW ZA1700WFS ZA1800NC ZA1600NFS

To

tal k

W

kW

/ h

a

SUM (kW) kW/ha

NO TILL CONSERVATION CONSERVATION INTENSIVE CONSERVATION

18

• Given our previous slides, it can be argued that the

drivers behind yield may differ significantly & therefore

makes it difficult to benchmark production systems.

• However, it is important to determine whether South

African maize can compete internationally due to the fact

that we compete for the same export markets

• The question: Are we cost effective & competitive?

• The following slides will focus on cost comparisons: USD

per ton

Benchmark: SA & USA

Cost comparisons: Direct costs

20

1) US seed cost were very high on a per hectare basis, but

relatively on the same level on a per ton basis.

2) The high nitrogen cost for ZA farms on a per hectare

basis lead to high per ton cost as well. Yields are not high

enough to compensate for the increased expenditure on

nitrogen cost. The US farm also benefits from the fact that

they have soybeans part of their rotation.

3) Crop protection seems to be as well fairly expensive on

a per ton basis for ZA farms.

Cost comparisons: Direct costs

Cost comparisons: Operational costs

Cost comparisons: All costs

Cost & profitability

Productivity Indicators: Nitrogen

GMO seed

US organic content

25

• Long run seed cost will merge

• Fertilizer: US continue to be lower due to distribution

system

• US subsidies will decline for US farmers

• Soils: Higher organic content

• Yields: Continuous yield increases in the US due to

hybrids & genetics

• Prices for maize will remain higher due to lower

transportation cost & domestic demand in the US

(Ethanol & Feed Consumption)

General conclusions:

No-till planting soybeans into corn

residue

Spring planting

Ten days……..

Thank You

What Questions Do You Have?

31

Divan van der Westhuizen

Bureau for Food and Agricultural Policy (BFAP)

Email: divan.vanderwesthuizen@up.ac.za

www.bfap.co.za

Kelvin Leibold

Farm and Ag Business Mgt. Specialist

Phone: 641-648-4850

E-mail: kleibold@iastate.edu

Contact: