Wake up call for farmers in SA

Wake up call for farmers in SA

Farmers can no longer rely on the expected increase in demand for food globally to ensure future profitability, international agribusiness expert said.

Professor Marcos Fava Neves, from the University of São Paulo and international agribusiness expert advised farmers to sought avenues that will yield higher margins.

Speaking at the recent DeKalb Create Conference in Bothaville, Free State in South Africa, Professor Neves said producer prices would remain flat for some time, and to stay in business farmers would have to increase profitability margins.

According to the world agricultural outlook for 2018 to 2027, recently published by the Organisation for Economic Co-operation and Development and the UN Food and Agriculture Organization, global agricultural markets had undergone significant changes since global food prices spiked in 2007.

While strong growth in demand for food was still expected, particularly for animal protein products, the rate of growth had slowed compared with the previous decade.

Neves said changes in the demand for food would shape global agricultural markets “in ways we have not seen before”.

As a result, the prices of agricultural commodities were expected to experience little or no growth during this period.

Neves noted that the weak price outlook would force farmers to “think differently” to increase their profit margins in order to maintain or increase current levels of profitability.

The use of digital and data technologies could assist farmers to increase efficiency, he said.

Neves also suggested that farmers should embrace innovation and differentiation that was, for example, offered by advances in crop breeding.

 

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