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Johannesburg – The agricultural sector boosted its income by 12.5% in the past year, mainly thanks to sales of animal and animal products, research by Statistics South Africa (StatsSA) revealed.
StatsSA released its Agricultural survey for 2015 on Wednesday. The survey measures the economic activity in the sector between July 2014 and June 2015. It revealed that the total income earned by the sector was R243bn, up from R216bn reported in 2014.
“Animals and animal products generated the largest sales,” the reported stated.
This was 44.9% of total income. Income generated from animals and animal products was over R109bn. This increased by 16.4% from the previous year’s R94bn.
Paul Makube, agricultural economist at FNB, explained that the increased income from animals and animal products was driven by the increased volumes of stock and the higher prices.
“The number of animals in feedlots during 2014/15 were very high,” said Makube.
The drought also led farmers to slaughter more animals.
Another factor contributing to increased sales of animals and animal products was the weak rand, which allowed farmers to export more meat, he said.
Earlier in the year, FNB released projections for red meat prices.
Prices were expected to increase within a range of 9% to 15%.
“We are close to the upper end of the range,” said Makube. This is driven by seasonal demand by consumers, and the anticipation of reduced supply as more producers hold back on slaughtering cattle, he said.
“Producers are slowly rebuilding their herds,” he said. Prices are expected to remain high in 2017 as supplies tighten.
READ: Red meat prices to rise as high as 15% - FNB
Horticultural crops and products such as fruits generated over R52bn of income. The exports of these crops was driven by the low exchange rates, which resulted in higher revenues.
Field crops, such as grain, generated over R50bn of income. They were impacted by the drought so there were lower volumes of these crops but they were sold at higher prices, explained Makube.
Total expenditure incurred by the sector also increased, from R206bn in 2014 to R225.5bn in 2015. Major contributions were attributed to purchases, amounting to R121.7bn or 54% of total expenditure. This was up 12% from the previous year’s level of purchases which amounted to over R108bn.
Salaries and wages accounted for 12.1% of expenditure at R27bn, followed by repairs and maintenance (5.6%), depreciation (4.7%) and interest (2.9%).
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