Farmers fail to reap maize crop reward
Most farmers will still be unable to compete with international producers mainly due to lower yields, says economist
While consumers are set to benefit from the bumper maize harvest, it does not mean all maize producers will make profits.
The Crop Estimates Committee said on Friday it forecast the 2017 commercial maize crop to be the biggest in the country’s history at 15,631-million tonnes. That is 101% bigger than the 2016 crop, which was the smallest crop since 2007.
Maize prices have plummeted since then. The spot price for white maize was R1,713 a tonne on Friday. In May 2015, it was R2,717 a tonne and R5,035 in February 2016.
Independent economist Fanie Brink said farmers were grateful for the high yield, but most would still be unable to compete with international producers mainly due to lower yields, higher production costs and financial support.
Maize is produced throughout the country, with the Free State being the largest producer followed by the North West and Mpumalanga.
Brink said at current prices, most farmers were unlikely to make a profit this season, though it depended on variable input and production costs. Farmers had to rely on reserves or, in many cases, on debt to stay in business, he said.
GrainSA CEO Jannie de Villiers said current prices were below the cost of production, which would affect dry land and irrigation farmers differently.
Agbiz head of economic and agribusiness research Wandile Sihlobo said farmers who did not hedge their prices during the dry season would struggle
to break-even at the lower maize prices.
"They faced higher input costs, which posed a challenge."
Sihlobo, however, said the benefits of the bumper crop were that consumers would see lower food prices, seasonal labour participation during the harvest would increase and that more maize being exported would result in increased
Brink said for the industry to be able to compete, "there should at least be tariffs in place to protect it against highly subsidised imports".