Low maize prices bring consumer relief but push Grain Producers under severe financial pressure

South Africa’s sharply lower maize prices might relief to consumers but are placing severe financial pressure on local grain producers, Grain SA warns.

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 (July SAFEX contract), while total maize input costs have increased by around 19%.
• Soybean prices have declined by 23%, despite input costs rising by as much as 45%.
• Sunflower prices have remained largely flat, offering limited relief.
• At the consumer level, maize meal prices increased by 11% year-on-year, and sunflower oil by 5% (November 2025 data), underscoring 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. Export activity has helped move surplus volumes into regional, South American and East Asian markets, but 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 declines.

Cost-of-production comparisons against current SAFEX maize prices show that margins are extremely tight and, in some regions, already negative. This reality places significant strain on producers’ ability to reinvest in inputs, technology and long-term sustainability.

“These are the realities of agricultural commodity cycles,” Grain SA notes. “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 producers are a strategic national asset. They underpin food security, rural employment and extensive value chains spanning storage, transport, milling and animal protein production. Yet local producers compete against international farmers who often benefit from direct state support, subsidies and highly efficient logistics systems.

Grain SA cautions that without stable, evidence-based policy, improved logistics performance, predictable trade administration and access to affordable, quality inputs, South Africa risks eroding its domestic grain-producing capacity.

“While consumers may experience short-term relief, it is critical to recognise that grain producers are under severe economic pressure. Protecting their sustainability is essential to safeguarding South Africa’s long-term food security.”

Ends

Issued by:  Grain SA Communications

Further enquiries:
Corné Louw, Head: Applied Economics & Member Services, Grain SA
corne@grainsa.co.za