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Blog : 2 December 2016 (Agriculture sector in South Africa)
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We take a look at South Africa's agriculture sector income and expenses for both 2014 and 2015. And from the results its clear the drought hardly had an impact in 2015. But we are sure the results next time this year will be very different from the results we looking at in this blog today.
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Agricultural Income
The bar chart below takes a look at the various income streams in the agriculture sector and compares results of 2014 with the 2015 results. As can be seen from the graphic all income types showed increases from 2014 to 2015.
Total income earned increased from R216.7billion in 2014 to R243,8billion in 2015. A growth rate of 12.5% when comparing 2014 to 2015. Not bad growth in income considering South Africa's economic climate during this time period.
Animal and animal products income increased from contributing around 43% to total income earned in 2015 to close to 45% of total income earned in 2015. Income from other agricultural products showed growth of 17.1% from 2014 to 2015. The fastest growth of all the agricultural income types.
Agricultural Expenditure
Agricultural expenditure increased from R206billion in 2014 to R225.5billion in 2015, reflecting growth in expenditure of 9.5%. Thus income as shown in the first graphic grew at a faster rate than expenses. A positive indicator for farmer's profit margins. But again this is likely to reverse strongly when the 2016 results are released, due to the severe drought experienced (in particular in 2016).
The pie chart below shows the contribution of various income types to total agricultural income in 2015. It is clear that the majority of income from agricultural activities comes from the Sale of Goods (be it livestock or crops) with it contributing 89.45% to total agricultural income in 2015.
Various income types
Other income types only contributed around 11% to total agricultural income as the majority of income comes from the sales of goods. Below we take a look at the contribution of the various goods sold to the total value of goods sold in the agricultural sector.
Type of goods sold
From the pie chart above it's clear that there are four major contributors to the sales of goods in the agricultural sector. They are the sale of field crops, Horticultural crops, Animals and Animal products, with these four groups making up over 95% of total sales of goods.
Different expenditure types
The majority of the expenses in the agriculture sector relates to Purchases, with it making up 54% of total expenditure. Below we will take a look at the major types of expenditure incurred in the sector. Second biggest expense in the agricultural sector is salaries in wages, with it making up 12% of total expenses. As a percentage of operating costs, wages does look a little on the low side. We will do an analysis of salaries per industry in coming weeks.
Type of purchases
The pie chart above reveals that the biggest purchaser type in the agricultural sector is feed and supplements for livestock, poultry and aquaculture with it contributing almost 27%, with animals in 2nd place with it making up just under 24% of total purchases. Fertilizers, seed and seedlings and fuel and grease contribute very similar amounts to total purchases with these three group combined making up around a quarter of total purchases in the sector.
While the results of the 2015 agricultural sector looks very good, with income exceeding expenses substantially, we are sure to see a strong reversal in this trend come the results of 2016, due to the severe drought experienced by thousands of farmers across South Africa.
While the results of the 2015 agricultural sector looks very good, with income exceeding expenses substantially, we are sure to see a strong reversal in this trend come the results of 2016, due to the severe drought experienced by thousands of farmers across South Africa.