PODCAST: Focus on wheat production in SA

In this week's podcast segment, I explore SA's wheat production changes over the past decades and the current import activities. I close off with an assurance that South Africans wont experience any wheat shortages over the foreseeable future. 

If one is not dealing with a particular commodity in their daily business, they rarely keep an eye on whether it is produced sufficiently locally or imported. The main concern for consumers is always whether they get their preferred products on shelves when they go to the store. This has been the reality of wheaten products in SA.

Hence, some South Africans realising that the country imports roughly half of its annual wheat consumption has sparked a discussion about why it is not expanding domestic production in all the fallow land in some provinces. This is a fair question about the threat of rising wheat prices and supply constraints amid the Russian invasion of Ukraine; both countries account for nearly a third of the world's wheat exports and have increased food security concerns. 

SA began importing over a million tonnes of wheat from the 2003/04 marketing year. In the years before, wheat imports averaged 458 518 tonnes, for example, between 2002/03 and 1989/90. The import surge resulted from increased consumption and a decline in area plantings.

From the 1997/98 season, SA's wheat plantings fell below a million hectares, which was the norm in seasons before this period. This decline is better explained by the profitability challenges that farmers have faced since that period, specifically in the Free State, and non-conducive climatic conditions. The critical thing to recall is that before 1997/98, SA's agricultural markets were regulated, and the various commodities boards played a huge role in setting prices, including wheat. Thus, after the deregulation period, the South African farmers had to compete in the global market. And thus, production areas of the Free State came under profitability strain, resulting in farmers switching from wheat to other profitable crops.

Other provinces of SA don't have large areas with conducive climatic conditions for high-quality wheat milling for human consumption. Hence, we speak of a few major wheat-producing provinces, being the Western Cape and mainly under irrigation in the Northern Cape, Free State, Limpopo and North West.

A significant development over the years is improving productivity in SA's wheat farming. In 1997/98 and years before that, SA's wheat yields were below 2,0 tonnes per hectare. Now, the yields are 4,3 tonnes per hectare as of the 2021/22 production season.

As a result of improved profitability, South African wheat production has remained relatively large, and the 2021/22 crop was the largest in 20 years, about 2,3 million tonnes. This harvest materialised as a result of both South African farmers' better farming practices and favourable weather conditions, which boosted yields. This also helped reduce the volume of imports SA required in the 2021/22 marketing year.

Wandile Sihlobo is chief economist of the Agricultural Business Chamber of SA (Agbiz) and author of “Finding Common Ground: Land, Equity and Agriculture”.