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INPUT AND PRODUCTION OVERVIEW
THE SEED INDUSTRY
Seed is an important production input and depending on the plant density, constitutes between 10%
and 17% of a maize producer’s variable production costs. Given excellent research in genetics and
technology, seed remains one of the most important inputs to increase yields and productivity in
the grain industry. Grain SA continues to monitor seed prices annually to maintain transparency and
competitiveness in the industry. Ongoing discussions with seed companies and SANSOR are also
held to communicate the needs and concerns of Grain SA members. The consistent increase in
seed prices remains a major concern to grain producers and some seed companies might start
experiencing resistance to high prices. Therefore, this message is conveyed to seed companies before
they decide on seed prices for the coming season.
Seed prices
There are twelve wheat cultivars and 22 irrigation cultivars in total available for the northern dryland
production areas, while there are eight different cultivars commercially available for the Western Cape.
There are four barley cultivars from which producers in the Western Cape can choose.
Wheat seed prices increased by 9,06% on average in 2022. Some cultivars increased by as much as
14,5%, while the cultivars of other companies increased by a total of 5%. What is interesting is that in
the northern production areas, wheat seed costs R463 per 25 kg bag on average, while seed prices
in the Cape amount to R503 per 50 kg bag. Barley seed prices increased by 9,5% on average.
There is a total of 10 cultivars commercially available for canola producers to choose from. Three
new canola cultivars were commercially available to producers in 2022. The prices of canola seed
increased by 18,7% in the 2022 season.
Maize seed prices for the 2022/2023 production season rose by 3,3% on average. Sunflower seed
prices rose by 2,5% on average, sorghum seed prices by 4,9% and soybean seed prices by 4,7%.
A good barometer for assessing price increases is the producer price index (PPI). Up until May 2022,
when seed prices were published, the PPI was 11,9%. On an average basis seed prices therefore
increased at a lower rate than production cost inflation.
Maize seed prices can be analysed further by comparing them with maize prices. Since the 2001/2002
production season the maize price index (
Graph 2
) weakened significantly compared to the maize
seed price index. With an estimated average producer price
[1]
of R3 667 per ton for the coming season
(2022/2023), thanks to the commodity boom, a general divergence remains between the maize price
index and maize seed prices, with a widening gap between the two.
INDICES OF THE PRICE OF MAIZE SEED AND THE PRODUCER PRICE
OF MAIZE
1985/1986
1986/1987
1987/1988
1988/1989
1989/1990
1990/1991
1991/1992
1992/1993
1993/1994
1994/1995
1995/1996
1996/1997
1997/1998
1998/1999
1999/2000
2000/2001
2001/2002
2002/2003
2003/2004
2004/2005
2005/2006
2006/2007
2007/2008
2008/2009
2009/2010
2010/2011
2011/2012
2012/2013
2013/2014
2014/2015
2015/2016
2016/2017
2017/2018
2018/2019
2019/2020
2020/2021
2021/2022
2022/2023*
3 000
2 500
2 000
1 500
1 000
500
0
MAIZE SEED INDEX
Index
MAIZE PRICE INDEX
*Preliminary
SOURCE: GRAIN SA
[1]
Average producer price = Safex, July 2023 price, less (average differential cost + handling costs)
Indices: 1985/1986 = 100