12 February 2021

During the lockdown, the MPO’s office will be closed, but all staff members are operating remotely and will be conducting their roles as normal from home offices.

The MPO will keep dairy farmers informed about the latest
developments through email, WhatsApp, and Facebook.

The MPO Bulletin is proudly sponsored by Westside

FEED COST REGIME CHANGE HERE TO STAY?

The size of the increase in the price of yellow maize and soya beans leaves the producer price of unprocessed milk buoyant.

The producer price of unprocessed milk in January 2021 is estimated at R5.37/ℓ, up from R5,19 in December 2020. Graph 1 below shows the estimated trend and levels of feed cost for February 2021 to December 2021. It uses the Johannesburg Stock Exchange (JSE) Commodity Markets, Mark to Market (MTM) prices (as on 9 February 2021) for February 2021 contracts to December 2021 contracts, for yellow maize and soya beans.

These prices are volatile and are influenced by developments in the energy market and the value of the rand, among others. However, it shows current sentiment of role players across the international market reflecting demand and supply going forward. The current driver of the higher yellow maize and soya prices on the Chicago Mercantile Exchange (CME) – formerly known as Chicago Board of Trade – is due to the unexpected higher demand from China. These developments flow through to our grain market as well, reflecting the higher prices despite signals of a good grain crop in South Africa.

The influence of the higher prices for the formulated feed, places downward pressure on profitability at farm level. The cost benefit of using feed concentrate is paper thin to none. This is illustrated in the graph below. Even the simulated unprocessed milk price of R6,00/ℓ is not reaching a ratio of 1,3:1.

In these circumstances dynamic and objective communication between milk famers and milk processors is important to create a balanced supply-and-demand market result.

MINIMUM WAGE SHOCKS AGRICULTURAL SECTOR

The department of employment and labour published the annual adjustment of the national minimum wage for 2021 on 8 February. Farmworkers will be entitled to a minimum wage of R21,69 per hour. Agri SA expressed its shock that the inputs of the agricultural sector were ignored and stated that the immediate equalisation and increase in wages for farmworkers would be unsustainable for the agricultural sector.

Agri SA pointed out to the department that the agricultural sector is a multifaceted sector that consists of mostly small-scale and medium-scale farmers, with large-scale commercial farmers only making up a small percentage of the industry. Most of the commissioners seem to have taken the incorrect view that the severity of the pandemic on the agricultural sector was minimal. The activities of subsectors such as the wine, tobacco, wool and barley industries were seriously hampered during the past few months and these industries are yet to recover from losses suffered. Press release. To read more, click HERE.

FIRST NATIONAL BANK (FNB) COMMENTARY ON FUEL PRICE INCREASE

Consumers and producers pay substantially more for petrol and diesel since Wednesday, 3 February 2021. Petrol increased by 81 cents a litre while diesel increased by 59 cents a litre. The main reason for these increases was mostly the large increase in the international oil price, with only 5 cents due to the volatile exchange rate.

Dawie Maree, head of information and marketing at FNB Agribusiness, says this is unfortunate news for producers and consumers because transport costs will increase, which will have a negative effect on disposable income.

February is normally a quiet month for producers in terms of grain production but producer inflation will most likely increase in the coming months. There is an expectation of further food price increases as well. To listen to the voicenote in English, click HERE.

Om na die stemnota te luister in Afrikaans, kliek HIER.

TEN FACTS ABOUT THE 2021 SA DAIRY CHAMPIONSHIPS

The annual South African Dairy Championships is the biggest, oldest and most prestigious dairy event in the country.
The purpose of the championships is to recognise and promote excellence in the dairy industry.
Hosted by Agri-Expo since 1834, the championships annually attracts around 900 entries from large, medium and small manufacturers.
These dairy products compete for the esteemed titles of SA Champion, the Qualité Award and the ultimate Product of the Year, awarded at the glamorous South African Dairy Awards.
The championships consists of more than 100 classes for cheese, yoghurt, milk, cream, ice cream, butter and other dairy products.
The winners in each of the classes are crowned as SA Champion, whereas only products of exceptional quality are awarded the Qualité award, recognised by the industry as the only mark of excellence for dairy products in South Africa.
After the first round of judging by more than 70 judges, an independent panel of five specialists determine the Product of the Year.
Judging takes place on Thursday 25 and Friday 26 February 2021 at the Percheron Hall at Elsenburg.
The SA Dairy Awards will be presented on Friday 26 March 2021 at the Endler Hall in Stellenbosch.
The SA Dairy Championships and the SA Dairy Awards are made possible in collaboration with platinum partner Synercore and other partners such as the MPO and The Dairy Mail.

For more information, visit www.cheesesa.co.za, or contact Agri-Expo at 021-975 4440 or cheese@agriexpo.co.za.

Alan Fourie – Chief Judge SA Dairy Championship

To find the most recent update on African swine fever on the National Animal Health Forum (NAHF) website, click HERE.

Syngenta South Africa in partnership with the North West University Business School and Grain SA is proud to announce the launch of the 2021 Leadership Academy for Agriculture Programme. Press release. To read more in English and Afrikaans, click HERE.

MPO uitvoerende hoof Dr Chris van Dijk het in ’n onderhoud op RSG gesels oor die risiko van insek-oordraagbare veesiektes met die goeie reënval in groot dele van die land en hoe om voorkomend op te tree daarteen. Om na die onderhoud te luister, kliek HIER.

The team at Chemuniqué are excited to announce that IFF and DuPont’s Nutrition and Biosciences (N&B) have officially completed their merger, creating an industry leader for customers in food, healthcare, consumer goods and industrial global markets. The new IFF has four well-positioned business divisions to serve customers’ needs: Nourish, Scent, Health and Biosciences and Pharma Solutions. Press release. To read more, click HERE.

TLU SA officially handed in its comment against the amendment of the existing Expropriation Bill (Act 63 of 1975) this week. The deadline for comment was extended from 10 February to 28 February 2021. Press release. To read more, click HERE.

The Dairy Mail team would like to remind all its readers to access a FREE copy of the digital issue of their favourite dairy publication. Click HERE to read The Dairy Mail February issue free online.

#TheDairyMail app has been officially launched and we invite you to download it to your device today! The app is not available in an app store; all you need to do is follow this link to download it directly to your device/s: https://dairymail-app.co.za/login

High feed cost and constrained demand are squeezing margins. To read the latest Absa Agri Trends: Livestock and Hides Report, click HERE.

To view the highlights of the Government Gazettes published from 29 January to 3 February 2021, click HERE.

Disclaimer: The MPO Bulletin is compiled from sources deemed reliable. However, the publisher accepts no responsibility for any errors, or the effect of any decisions based on this publication.

Vrywaring: Alhoewel die MPO Bulletin saamgestel word uit bronne wat as betroubaar beskou word, neem die uitgewers geen verantwoordelikheid vir aksies of verliese wat weens die gebruik van hierdie inligting mag ontstaan nie.

The Dairy Mail

Contact us/Kontak ons

Dr Chris van Dijk
Chief executive/Uitvoerende hoof

Barbara Bieldt
Market development and compliance services manager/Bestuurder: markontwikkeling en voldoeningsdienste

Bertus van Heerden
Economist/Ekonoom

Philip Swart
Producer services manager/Bestuurder: produsentedienste

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