Summary of gross margins
Figures 4.1-4.4 provide a summary on gross margin performance of dryland and irrigated crops over the period from 2018 (adjusted to account for actual yields) to 2023 (projected).
Across the 24 dryland crops in 7 agro-ecological regions, an average gross margin of R7,355 per hectare is projected for the 2021/22 production season, approximately 34% lower compared to the 2020/21 realised production season. Important to note, is that this only considers direct costs and excludes overhead costs. For the 2021/22 season, it is projected that on average, maize gross margins will decrease from 2020/21 levels by approximately 50%. This is due to increasing input costs, lower expected commodity crop prices and assuming trend yields. The gross margin for irrigated crops is also projected to decrease, with maize projected to decline by an average of 59% in 2021/22 (relative to 2020/21 levels), sunflower by 30%, and soybeans by 8%. The cultivation of sunflower is projected to outperform maize and soybeans on dryland and under irrigation for the 2021/22 production season.