Economic Research Manager at South African Canegrowers’ Association.
The data gathered and analysed for the 2015/16 season shows the effect the drought has had on growers. The season was a poor one in terms of yield, especially for the dryland growers where in some cases yields halved. The total dryland crop decreased by 34% due to the drought with an overall industry decrease in total crop of 26% compared to a normal season.
This meant that for some growers the decision to harvest or not to harvest at all, was a difficult one as they may not have made a worthwhile return on their cane. The large-scale grower cost survey reflects the reduced revenue achieved by growers and the cost saving that had to be implemented to survive the drought period.
The grower data gathered and analysed showed the following results.
Figure 2 shows the significant decline in percentage difference from the previous season for Real Revenue, Real Total Fixed and Variable Costs and Real Net Operating Income.
The decreases over the 2014/15 and 2015/16 seasons from the good season of 2013/14 can be attributed to poor yield and cost saving measures growers implemented during the drought affected season. Better rainfall in the 2016/17 season showed slight improvement in yield but reinvestment in terms of replanting and normal farming practice is needed to improve yields and margins. This is only enabled by better rainfall.
Figure 3 shows the percentage breakdown of the costs attributed to cane production.
There were some noticeable changes in costs per hectare due to either the low yield or cost saving measures instituted by growers to see through the drought period. Some of the major costs and their changes compared to the 2014/15 season are listed below;