Industry

analysis

Farm

business

Consumer

economics

Cereals

White maize

Yellow maize

Wheat

Sorghum

Barley

Oilseeds

Sunflowers

Soybeans

Canola

Cotton

Livestock and Dairy

Chicken

Beef

Mutton

Pork

Eggs

Dairy

Wool

Other

Wine

Sugar

Potatoes

Bio-fuels

Horticulture

DDGS

System of Models:

The Financial Simulation Model (FinSIM), a farm-level simulation model, was constructed for simulating the likely impact of changes in markets and policies on the financial viability of a representative farm.

FinSIM is linked to the commodity models as discussed in the previous section. Based on the output results of the commodity models, baselines and scenarios are developed in terms of the financial position of a representative farm in a specific region of South Africa. At present, FinSIM has the ability to simulate a representative farm that has the different enterprises as set out in the section on what commodities is currently modelled by the commodity models. This includes the main grain and livestock enterprises found in South Africa. However, FinSIM is in the process of being upgraded to a level where the major wine, fruit and vegetable enterprises will also be included in the farm-level structure.

Output results simulated by FinSIM consist of the financial statements of the representative farm namely the income statement, cash flow statement and statement of assets and liabilities. FinSIM can be run in both deterministic as well as stochastic mode, and makes use of Simetar©, developed by Prof. James Richardson at the University Texas A & M, Texas, USA.

Currently FinSIM is used to model and simulate representative farms in the following regions of South Africa: Western and Southern Cape, parts of Northern Cape, North West, Free State and Mpumalanga highveld. It is envisaged that representative farms will be set up in the near future in Limpopo, KwaZulu-Natal, Eastern Cape and the Mpumalanga lowveld. The map indicates some of the areas already covered in terms of representative farms.

BFAP is currently involved in the writing and editing of the food cost review and various other retail price analysis reports which are released by the NAMC on a regular basis. The reports analyse the trends in food price spread, farm values and retail food price trends of essential staple foods in South Africa. The aim of the reports is to provide the industry roleplayers with detailed information on this topic on a regular basis.