South Africa’s sharply lower maize prices may offer relief to consumers, but they are placing severe financial pressure on local grain producers, Grain SA has warned.
According to Grain SA, lower maize prices support reduced costs for staple foods and benefit the downstream value chain, particularly the livestock and poultry sectors, through cheaper feed. Over time, this can ease pressure on meat, dairy and poultry prices for consumers.
However, the same price environment is proving devastating for grain producers. In many cases, farm incomes have declined by close to 50% compared to a year ago, while input costs, financing expenses, and production risks remain stubbornly high.
Recent market data highlights the imbalance producers are facing. Maize prices are down approximately 22% year-on-year based on the July Safex contract, while total maize input costs have increased by around 19%.
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Input costs rise as producer prices fall
Grain SA noted that soybean producers are facing even steeper pressure, with prices declining by 23% despite input costs rising by as much as 45%. Sunflower prices have remained largely flat, offering limited relief to growers.
“At the consumer level, maize meal prices increased by 11% year-on-year, while sunflower oil rose by 5% according to November 2025 data. This highlights that lower producer prices do not automatically translate into immediate retail price relief.
“The primary drivers behind lower maize prices are well understood. Global maize production reached record levels, while South Africa harvested one of its largest maize crops on record, resulting in domestic supply well above local demand,” Grain SA said.
Export activity has helped move surplus volumes into regional, South American and East Asian markets. However, international prices remain under pressure due to intense global competition.
A stronger rand against the US dollar has further reduced local prices by lowering export-parity values. At the same time, more than 80% of grain production inputs are imported and priced at import parity, leaving producers exposed to rising costs while income continues to decline.
Cost-of-production comparisons against current Safex maize prices show that margins are extremely tight and, in some regions, already negative. This places significant strain on producers’ ability to reinvest in inputs, adopt new technology and maintain long-term sustainability.
“These are the realities of agricultural commodity cycles. Good rainfall and increased production benefit consumers through lower prices, but without adequate buffers, prolonged low returns risk undermining production capacity, skills retention and future food security,” Grain SA noted.
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