How unity, technology, and added value contribute to the profitability of farms
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How unity, technology, and added value contribute to the profitability of farms

Success in modern South African agriculture depends on the ability to adapt, establish thoughtful partnerships, and ensure resilience to climate change. Following the Nampo Cape 2026 event, Daniel Rossouw from Nedbank shared his thoughts on the key trends shaping South Africa's agricultural sector and how strategic collaboration can guarantee long-term commercial sustainability.

As Head of Agricultural Sales at Nedbank, Rossouw noted that this year's Nampo gathering gave the sector a new impetus and a shared sense of purpose. Faced with complex market and operational challenges, industry stakeholders are increasingly uniting to protect productivity and build sustainable growth.

Under the theme 'grow together,' the event highlighted the growing demand for collaboration across the entire agricultural ecosystem. Discussions brought together representatives from organized agriculture, agribusiness, financial institutions, and political leaders, including the Minister of Agriculture and the Minister of Land Reform and Rural Development.

Rossouw emphasized: 'For me, the drive towards greater unity in agriculture was a truly outstanding moment, and I believe very deep discussions took place.' These meetings focused on critical regional and national issues, such as the future viability of the Western Cape grain industry, current biosecurity efforts related to rinderpest vaccination, and the role of local government in maintaining rural infrastructure to support agricultural logistics.

On the exhibition floor, farmers' interest was concentrated on innovations designed to optimize efficiency and reduce environmental risks in crop and livestock farming. Demonstrations of high-quality equipment included localized weather forecasting systems and data management platforms, as well as renewable energy sources designed to protect farms from utility costs.

Equipment developed for climate-smart agriculture also took center stage, with an emphasis on zero and minimum tillage machinery that minimizes soil disturbance. For Nedbank, the main focus was on regenerative agriculture and creating practical links in the value chain to help clients effectively implement sustainable farming principles.

Highlighting the link between environmental stewardship and farm performance, Rossouw asserts that economic success and environmental responsibility are inseparable. Long-term profitability depends on conserving and restoring natural resources, especially soil health and water availability.

He explains: 'You cannot talk about profitability and sustainability without the other. It is a completely integrated system.' He adds that ultimately, any activity of a farmer or agribusiness must be profitable for more than one generation while caring for natural resources.

This focus on long-term resource management underlies the ability of a farm to remain economically viable amid changing climatic cycles and market conditions.

A significant shift in the sector is the move towards vertical integration. Since raw material producers are typically price takers in open commodity markets, moving into processing, local packaging, and specialized export logistics offers a direct path to generating additional profit. Rossouw notes: 'We definitely see a major opportunity beyond primary agriculture.' He continues that instead of increasing raw material production, the focus is on vertical integration, both up and down the value chain. If these connections can be established and greater integration achieved, he believes it will significantly benefit the raw material producer in terms of profitability.

This shift aligns closely with national development goals within the Agricultural and Agri-processing Master Plan (AAMP), which prioritizes localization, export expansion, infrastructure development, and digital integration. By integrating operations upstream or downstream, producers can reduce their exposure to raw material price volatility.

Overcoming market changes, implementing technologies, and adapting to climate requires continuous financial support and a personalized approach to risk management. Financial institutions play a crucial role by going beyond traditional banking services, providing structured, climate-smart solutions that allow producers to diversify, adopt new technologies, and expand into value-adding areas.

To learn how Nedbank can partner with your agricultural business to navigate market transitions and transition to more climate-resilient practices for long-term profitability, contact business@nedbank.co.za or reach out directly to your regional Nedbank business manager.

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How South African farmers can protect profits amid rising resource costs
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How South African farmers can protect profits amid rising resource costs

While farm success was previously determined by weather and yield, in 2026, rising production resource costs are becoming a priority. Daniel Rossouw, Head of Agricultural Sales at Nedbank, analyzes the economic factors shaping South Africa's agricultural sector and offers producers strategic ways to protect their profits.

Successful farming operations rely on a careful balance of energy, labor, and raw material expenses, which is critical for business survival. Rossouw, with nearly 35 years of experience in agricultural finance, notes that the 2025–2026 period represents one of the most challenging economic landscapes for this sector.

Agricultural enterprises face not a single isolated factor, but cumulative cost pressure across several key areas. Rossouw explains that in 2026, the greatest pressure comes from combined resource prices, including energy, labor, logistics, and finance, rather than any single type of expense. He emphasizes that the severity of these issues varies greatly depending on the specific commodity.

Among the main resources, fertilizers stand out as a significant source of pressure, especially for grains, oilseeds, sugar, and horticulture. In standard grain systems, fertilizers account for 20% to 35% of resource costs, and significantly more in high-intensity operations. According to the latest estimates, fertilizer prices have risen by up to 50% compared to the same period last year.

Since South Africa imports over 80% of its fertilizer needs, local prices are closely linked to global trends in crude oil prices and exchange rate fluctuations.

Fuel presents similar difficulties. Diesel accounts for up to 15% of resource costs in grain production, and because about 70% of diesel fuel in the country is imported, farm expenses are directly dependent on global oil markets.

In addition to energy and fertilizers, other necessary operating costs are steadily increasing:

  • Electricity and utilities: Although power outages have ended for an extended period, electricity tariffs continue to rise. This heavily impacts irrigated agriculture and high-value crops. While more farmers are investing in solar and alternative energy sources, such solutions require significant initial capital investment.
  • Labor dynamics: This is particularly important in labor-intensive, high value-added sectors such as horticulture, viticulture, and sugarcane. Labor costs include not only rising base wages. Increases in the minimum wage, persistent shortage of skilled personnel, and variable productivity make these sectors especially vulnerable to margin compression.
  • Crop protection: Active chemical ingredients are strongly tied to international commodity prices and the US dollar. Unlike optional farm expenses, reducing chemical use directly increases production risks, leaving little room for cost adjustments.

To cope with this pressure, Rossouw insists that producers must expand their financial monitoring beyond traditional metrics such as current commodity prices and local rainfall. Over the next twelve months, farm profitability will be determined by the dynamic interaction of macroeconomic forces.

He points to several critically important variables requiring close attention:

  • Interest rates and inflation: Although potential rate easing offers hope for relief, persistent inflationary spikes could delay further rate cuts, sustaining high financing costs.
  • Exchange rate stability: The Rand has recently shown strong resilience, but currency markets remain inherently volatile and require constant risk management.
  • Geopolitical turmoil: Fuel, oil, and fertilizer markets remain highly sensitive to international conflicts and global supply disruptions.
  • Climate change: Early signs and warnings of the El Niño cycle indicate increased production risks in the 2026 and 2027 seasons.
  • Municipal and infrastructure overheads: Rising municipal tariffs, water costs, and localized power restrictions continue to limit expansion in high-growth and export-oriented regions.

Essentially, managing modern agricultural risks requires looking at the big picture and preparing for economic instability even before purchasing resources or sowing seeds. As market conditions change, it is crucial to collaborate with a financial partner who understands these macroeconomic shifts to maintain liquidity and structural stability.

To learn how Nedbank can become a partner to your agricultural business and support your strategic planning for the 2026–2027 seasons, contact business@nedbank.co.za or reach out directly to your regional Nedbank business manager.

Rapeseed industry growth in South Africa stimulates investment and processing opportunities
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foodformzansi.co.za

Rapeseed industry growth in South Africa stimulates investment and processing opportunities

The significant growth of the rapeseed industry in South Africa over the past decade is opening up new prospects for local investment, deep processing, and market development. However, the sustainable expansion of this sector will depend on continuous access to innovative genetic materials.

According to Grain SA, rapeseed has transformed from a simple alternative crop rotation into a key element of the production system, especially in the Western Cape.

Cultivation areas in South Africa have increased significantly: from 34,000 hectares in 2010 to 74,120 hectares in 2020, then to 165,750 hectares in 2024, 174,515 hectares in 2025, and approximately 192,300 hectares in 2026. About 188,000 hectares are located in the Western Cape.

Grain SA noted that this growth is driven by advancements in genetics, production technologies, mechanization, research, and market development. Rapeseed has ceased to be merely a tool for crop rotation and weed control, becoming an independent and important economic crop. In recent years, rapeseed has helped many producers in the Western Cape, and the situation may repeat this success this year.

According to Grain SA, the company Overberg Agri is currently conducting necessary research and submitting applications for the possible construction of a rapeseed oil extraction plant in the Swartland by 2027. This investment could potentially increase added value for local producers and create additional processing capacity to support the growth of rapeseed production.

For Swartland farmers, processing products closer to the point of production can contribute to a more efficient regional value chain. This initiative is also a positive sign of private sector confidence in the long-term potential of the industry.

As domestic production increases, export opportunities will become increasingly significant in maintaining sustainable industry growth, especially if growth rates exceed domestic consumption and production capacity. Nevertheless, where economically viable, preference is given to local processing and value addition. Local processing of oilseed, meal, and other rapeseed products allows most of the profit to remain within the South African economy. Furthermore, there are additional opportunities to develop domestic demand for rapeseed meal, particularly in the poultry, dairy, and feed industries.

Improved varieties have already played an important role in increasing yields, enhancing adaptability, and managing production risks. To maintain the competitiveness of producers and strengthen the industry against changing threats from diseases, weeds, and climate, it is necessary to continue investing in research, genetics, and new breeding technologies.

The main conclusion drawn by Grain SA from the discussion is that the golden future of rapeseed lies not just in increasing cultivated areas, but in creating a value chain that develops parallel to production. This requires profitable producers, continuous investment in genetics and technology, responsible production methods, sufficient local processing infrastructure, and access to growing domestic and international markets. The success of the rapeseed industry has been achieved through collaboration between producers, researchers, seed companies, processors, marketers, and industry organizations. If this collaboration continues, there is a solid foundation for rapeseed's sustainable transition to the next stage of growth and the creation of added value in the South African agricultural economy, as stated by Grain SA.

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