Almost every business experiences financial difficulties from time to time. Farming operations, however, face greater risks than many other businesses, which makes it even more important for farmers to stay on top of their game.
Theo Rabe, CEO of agribusiness NWK, explains that farming returns are significantly lower than for most other businesses, averaging between 5% and 7% depending on the commodity. To make matters worse, farmers are price-takers, with little or no influence over the market. So a poor yield is not necessarily compensated for by a better price.In addition to this, farmers have to cope with changing climatic conditions, and recent times have seen more droughts, changes in rainfall patterns and extreme weather phenomena.
To shield their businesses against these challenges, farmers should, first of all, be aware of their financial situation. According to Rabe, many do not have a clear idea of their income and expenditure.
DO A FINANCIAL ANALYSIS
A financial analysis will not only allow a farmer to evaluate the current state of the operation, but help him or her to predict future performance and make informed decisions by identifying wastage and areas where operations can be improved.
Nevertheless, predicting future performance is easier said than done, as many variables are at play. Ernst Janovsky, former head of Absa’s Agribusiness Centre of Excellence, advises farmers to base these predictions on longterm historic performance and to take into account long-term climatic and macro-economic trends, such as exchange rates and economic growth.
During the good years, a farmer should avoid overstocking or buying things that don’t add value to the business. It’s also crucial to save up for the tough times by building a feed bank, for example, or paying off debt in a ‘flexi reserve’ account.
Diese Geschichte stammt aus der October 25, 2019-Ausgabe von Farmer's Weekly.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der October 25, 2019-Ausgabe von Farmer's Weekly.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
New farmers' seedling pitfalls
Inexperienced farmers may be tempted to grow seedlings from seed themselves, but they have much to gain by trusting a seedling grower at a nursery to perform this task for them instead
South African avocado production: a success story
Avocado production in South Africa has expanded markedly since the industry's humble beginnings over 80 years ago. From a small grove planted in 1938 in what was then Nelspruit, the industry has blossomed to seven million trees planted on 20 000ha. Dr Guy Witney, project manager at Great Brak Avos, spoke to Annelie Coleman about the country's avocado production.
Unlocking value through livestock exports
Exporting livestock might sound like a daunting business that's better left for big companies, but Gerrie Ferreira, who farms near Oudtshoorn in the Western Cape, has been doing it successfully for almost 30 years, sometimes in partnership with other breeders. He spoke to Glenneis Kriel about the huge potential this market holds, and offers some advice for farmers who are contemplating going this route.
An agribusiness's dedication to community upliftment
For agribusiness NWK, located in Lichtenburg, North West, corporate social investment is an important part of creating a positive influence alongside financial returns. Johan Bezuidenhout, NWK’s group manager of corporate marketing and communication, spoke to Annelie Coleman about why the company chooses to invest millions of rands in the area it operates in every year.
Empowering dreams, transforming lives
Since its launch in 2013, the Agri's Got Talent competition has revolutionised the lives of many farmworkers by unlocking their hidden talents and fostering a culture of empowerment. Glenneis Kriel spoke to various finalists about how the contest has changed their lives.
Foreign investment: agriculture maintains its appeal
South Africa remains a popular destination for foreign investors, despite an often negative outlook from its citizens. It is a gateway to Africa, and with its counterseasonal production to the Northern Hemisphere and favourable weather, local agriculture is especially well placed to attract foreign interest, bringing with it hope for rural communities
The real value and message of COP29 for SA agriculture
While the 2024 Conference of the Parties may have disappointed those who hoped for real progress, it's more important for South African agriculture to highlight its role in carbon mitigation
Improving efficiencies in feed and grain milling
Bühler, a Swiss-based company that provides solutions and equipment for various industries, including food and animal feed processing, has pledged that by 2025, it will deliver scalable solutions that will reduce energy, waste and water by 50% in the value chains of its customers.
Tips for better olive production
At an SA Olive Association field day in November, industry experts shared ways to improve olive production efficiencies, from soil preparation to harvesting.
More effort needed to protect vulnerable cheetah
On International Cheetah Day, commemorated every year on 4 December, emphasis was placed on the vulnerability of the species.
