1. AGRICULTURAL ECONOMICS By Pieter Taljaard and André Jooste Agri Benchmark Beef conference 2007

2. AGRICULTURAL ECONOMICS Outline Introduction and background Co-workers and countries Agri-benchmark Methodology RSA representative data Results Conclusions

3. AGRICULTURAL ECONOMICS Introduction & Background International farm comparison analysis –Beef finishing (feedlots) –Cow-calf production system Collaboration in RSA UP - NAMC –UFS NAMC (Membership sponsor) UFS (Beef) UP (Cash crops) –Dairy (MPO) Overall objectives – competitiveness and potentials of regions

4. AGRICULTURAL ECONOMICS Introduction & Background 2007 Beef conference and pre- conference training –Braunschweig, Germany –New countries: RSA, Australia and India –Beef finishing - 16 countries, 38 farms

5. AGRICULTURAL ECONOMICS Participating countries Western Europe –Austria –France –Germany –Italy –Ireland –Spain –Sweden –UK Eastern Europe –Hungary –Poland North America –Canada –USA

6. AGRICULTURAL ECONOMICS Participating countries South America –Argentina –Brazil Asia & Oceania –Australia –China –India Africa –South Africa

7. AGRICULTURAL ECONOMICS Co-workers

8. Agri-Benchmark (AB) methodology AB SOP –Select regions and locations –ID prevailing production system –Determine farm size of typical farm(s) –Data collection (2007) and updating (2008) Standard questionnaire (pannel of farmers) –Farm data - Typical or representative figures Prices for inputs and outputs

9. AGRICULTURAL ECONOMICS RSA representative data 1 Beef finishing (feedlot) –One time standing capacity 25 000 head (i.e. +/- 75 000 head annual through-put) 3 Cow-calve farms –Vryburg (250 cows) –Heibron (300 cows) –Howick (200 cows)

10. AGRICULTURAL ECONOMICS Results - Beef finishing Share of market return

11. AGRICULTURAL ECONOMICS Results - Beef finishing Market returns and coupled government payments 2006 (US$ per 100 kg carcass weight)

12. AGRICULTURAL ECONOMICS Results - Beef finishing Purchase prices (US$ per 100 kg live weight)

13. AGRICULTURAL ECONOMICS Results - Beef finishing Total cost by cost items (US$ per 100 kg carcass weight)

14. AGRICULTURAL ECONOMICS Results - Beef finishing Non-factor costs by animal purchases and other cost (US$ per 100 kg carcass weight)

15. AGRICULTURAL ECONOMICS Results - Beef finishing Non-factor costs excluding animal purchases (US$ per 100 kg carcass weight)

16. AGRICULTURAL ECONOMICS Results - Beef finishing Short and medium term profitability (US$ per 100 kg carcass weight)

17. AGRICULTURAL ECONOMICS Results – Cow-calf farms Share of market return

18. AGRICULTURAL ECONOMICS Results - Cow-calf farms Weight at weaning per head (kg live weight per head)

19. AGRICULTURAL ECONOMICS Results - Cow-calf farms Weaner prices per head (US$ per head) R2800/ head

20. AGRICULTURAL ECONOMICS Results - Cow-calf farms Weaner prices per 100kg live weight (US$ per 100kg live weight)

21. AGRICULTURAL ECONOMICS Results - Cow-calf farms Total returns (US$ per 100 kg live weight sold)

22. AGRICULTURAL ECONOMICS Results - Cow-calf farms Total cost by factor and non-factors costs (US$ per 100 kg live weight sold)

23. AGRICULTURAL ECONOMICS Results - Cow-calf farms Labour intensity (hours per suckler-cow and year)

24. AGRICULTURAL ECONOMICS Results - Cow-calf farms Total returns and costs by cash and non-cash costs (US$ per 100 kg live weight sold)

25. AGRICULTURAL ECONOMICS Results - Cow-calf farms Short and medium term profitability (US$ per 100 kg live weight sold)

26. AGRICULTURAL ECONOMICS Results - Cow-calf farms Whole farm profitability (‘000 US$ per farm)

27. AGRICULTURAL ECONOMICS 2008 Annual update – expand Local network (regional) Emissions benchmarking Quarterly price info Trade profiles Beef conference (Brazil) –Bio-energy and beef production –SA farm story (case farm)

28. AGRICULTURAL ECONOMICS Conclusion Larger representation in SA Useful info Further analysis –Comparative advantage analysis Involvement of industry

29. AGRICULTURAL ECONOMICS Thank you!