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SOUTH AFRICAN AGRICULTURAL MACHINERY
ASSOCIATION (SAAMA)
2007 AGM
CHAIRMAN’S REPORT
Agricultural environment
For two consecutive years the South African maize crop was below average which has had a negative effect on tractor and harvester sales. Maize farmers are the biggest users of machinery especially bigger tractors and harvesters. The average maize crop since 2000 has been 7,162 M ton compared to 6,618M ton for 2006 and 6,901M ton for 2007 with the highest figure the 11,450M ton during 2005.
The estimated wheat crop for 2007 is only 1,664M ton which is 21% lower than last years 2,105M ton. This is mainly due to the negative effect of the drought on the wheat yields. With a consumption of about 2,7M ton pa that will leave the country with a shortfall of more than a million tons.
Grain prices are currently at very high levels with December futures trading at the following levels:
- Wheat – R 3 280/ton
- White Maize – R 1 940/ton
- Yellow Maize – R 1 957/ton
The prices for wheat and yellow maize are the highest ever. Wheat reached a record price of $8.70 / bushel on the Chicago grain exchange. The price was mainly driven up by the demand for maize for ethanol production. In the USA more maize and less wheat was planted. Internationally stock levels are down which is also driving prices up.
The drought during the 2006/07 summer and the subsequent lack of fodder also had a negative effect on baler sales.
Agricultural machinery sales
August YTD figures on sales for agricultural machines are lower than last year where:
- Tractors are down by 10,1 %
- Harvesters are down by 21,8%
- Balers are down by 11,5%
Given the abnormal high amount of tractors and harvesters that were exported, mainly to Zimbabwe, we decided to deduct these figures and only report South Africa and BLNS country sales. The year to date exports amount to 963 tractors and 29 harvesters.
SAAMA golf day
Last year’s golf day was held at Modderfontein Golf Club and was a huge success. We raised R 67 500 which was by far the most money ever raised at a SAAMA golf day. I want to thank the previous chairman, Nick Sanders and his committee for a job well done. This years’ golf day is planned for 20 September at the ERPM Golf Course in Boksburg. Given the standard that was set at the previous golf day, a lot of hard work has gone into at least maintaining the same high standard.
Agfacts
Agfacts keeps providing valuable information to the industry. The survey on implement sales up to the end of 2005 is just about complete and the results will forwarded to the participants.
Grain SA
Nampo
Good progress was made to get better returns for SAAMA members from the industry’s biggest marketing spend, namely the Nampo Harvest day. In order to get better value from the demos, for both farmers and SAAMA members, the format was changed for the first time during the 2006 harvest day. The new focused demo concept worked very well and even the most sceptic people had to admit it. To further save cost, no demos were done during 2007, which once again worked well notwithstanding a lot of scepticism. SAAMA committed to demos during 2008 after which a decision will be taken regarding the future of demo’s at Nampo.
Not having demos during 2007 was a compromise between SAAMA and Nampo instead of having Nampo only every second year, in line with international shows. This issue will have to be resolved as SAAMA members cannot afford the Nampo expense every year and GSA can’t afford to have Nampo only every second year.
I want to thank the Nampo management for their cooperation and willingness to take risks to improve Nampo.
Input committee
A meeting was held with the Grain SA Input Committee where valuable information was exchanged. SAAMA members learned more about the trends in the grain industry and we were able to explain trends and critical issues in the mechanisation industry.
Value chain network group
The Chairman represented the mechanisation industry on this networking group that aims to improve the efficiency of the agriculture value chain. This group meets with the State President on an annual basis.
Members
A decision was taken to extend an invitation to all the role players in the industry that qualify to be SAAMA members. There was a specific focus to include the new tractor importers. Two of these new players already joined that took our membership up to 20 companies.
Grey imports
Following meetings with DTI and the Pakistani Trade commissioner articles were placed in the agriculture media warning farmers about the dangers of grey imports.
Homologation
SAAMA is concerned about the illegal importation of second hand tractors and tractors that are imported not complying with legislated standards. For instance, tractors that do not comply with tier II emission standards are imported but all new models that are homologated by SAAMA members has to comply. Following several unsuccessful attempts we have now been able to set up a meeting with the SABS with the intention to level the playing field.
Marketing
SAAMA was marketed well during the course of the year with a supplement in the Landbou Weekblad. Thanks to all the members who advertised in the copy to make the supplement possible.
Various articles were also published in Grain SA under the name of SAAMA. We also received good exposure on Agri TV with the highlight, a whole morning’s program dedicated to the agricultural mechanisation industry.
Response
The Response reporting system is one of the best, if not the best, in the world that adds a lot of value to the members. It is imperative that sales are reported correctly i.e. in the correct area in the correct month.
Access to the information was discussed at several occasions and it was decided that the information will only be given to members who participate. New members will only have access to information after having reported sales for 6 months.
SAAMA Finances – 2006/2007
The Association had a net excess of income over expenditure of R70 000.00 for the year. This was largely due to the Golf Day which made a profit of approximately R67 500.00. The balance on the current account at the end of the year was almost R120 000.00. Response Group has been contributing R631.00 per month.
The balance on the notice deposit account at the end of the year was almost R79 000.00. R50 000.00 will be transferred from the current account to the notice deposit account once the account signatories have been changed at the AGM.
All members have now paid their dues for the 2006/2007 financial year. There was a gain of two full members, Irrimec/Sonalika and Mahindra. Super Group Equipment has joined in the 2007/2008 financial year as full members.
Prospects
The growing demand for grain and the lower international stock levels caused grain prices to rise. This is all very positive for the agricultural industry.
Given the current high grain prices, the prospects are looking good for tractor sales for the rest of the year provided that we get sufficient spring rain. The sale of high kW tractors has already started to pick up. We estimate South African tractor sales for 2007 to be 5 200 units which is 5 % lower than last year.
We estimate the South African harvester sales for 2007 to be only 140 units given the estimated low wheat crop for 2007 and the low YTD figure. Baler sales should total about 460 units (11 % down), provided we get sufficient spring rains.
General
Our previous Chairman, Nick Sanders, retired during the year. I would like to thank Nick sincerely for all his time and hard work put into advancing SAAMA and SAAMA member’s interest over a number of years, but especially during the last two years that he was Chairman. We wish Nick good health and a happy retirement.
Thank you to all the SAAMA members for your support and cooperation. Notwithstanding the fact that we compete with each other in a very competitive market, we could work together to advance our industries interests.
To the executive committee and our secretary, Dr Jim Rankin, thank you for your support
All credit goes to our Good Lord who once again blessed us during the past year.
P CHARLES VAN NIEKERK
CHAIRMAN
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