Wheat crisis deepens as government stalls

In that time, pressure on South Africa’s wheat producers has intensified to breaking point, reviving fears of a collapse like that in 2014, when the industry called for a turnaround strategy after wheat hectares shrank dramatically under severe financial strain.

Dr Dirk Strydom, manager of grain economics and marketing at Grain SA, told Farmer’s Weekly that the crisis was eventually stabilised through relaxed quality standards, improved seed technologies, and better production practices, along with changes such as grading adjustments.

These interventions kept national output steady despite a sharp contraction in the area under production, which fell from just under 1,6 million hectares in the late 1990s to just above 600 000ha. Average yields, in turn, rose from about 1t/ha in 1995/96 to more than 4t/ha by the 2020s.

“But hectares are at risk of falling again. Northern producers are moving to more competitive crops such as maize and soya bean, while farmers in the Western Cape, constrained by climate, have no such option. And for many of them, the financial strain has reached crisis levels,” he said.

Farmers have lost millions

Swartland farmer and Grain SA board member Koos Blanckenberg said producers in the Swartland suffered “huge losses” in 2024 and 2025 due to unfavourable weather, high input costs, and depressed market prices. He added that the impact varied depending on a farmer’s debt exposure, size of operation, production structures, and ability to absorb consecutive poor seasons.

According to him, production was already under pressure before COVID-19, but the pandemic created an “artificial environment”, with international wheat prices escalating while local farmers enjoyed decent harvests that temporarily cushioned skyrocketing input costs caused by global trade disruptions.

“We were overly optimistic that we were entering a better cycle. Unfortunately, international prices have since decreased substantially,” Blanckenberg added.

Now, he knows of several farmers who are sitting in a financial predicament, with many of them already cutting back on lime and gypsum last year in a desperate attempt to stay afloat.

“You might get away with that for one year, but the financial situation has not changed. They will be forced to do it again, and that will come back to bite them. Many farmers renting land simply will be unable to continue. There are farmers who lost millions of rands in 2024 and then again in 2025,” he said.

Blanckenberg explained that the consequences extend well beyond farm boundaries: “This loss is not only affecting farmers’ pockets but also their workers and small towns like Malmesbury, Piketberg, Moorreesburg, and Swellendam, which rely heavily on agriculture.”

He noted that wheat prices he received declined by an average of 7% per year over the past three years, while his input costs for fuel, seed, chemicals, and fertiliser had fallen by only 2,5% per year.

“This means I’m sitting with a 21% fall in [wheat] prices, while input costs only decreased by 7,5%,” he said.

Even farmers who are still technically profitable aren’t generating enough to remain competitive. “They will not be able to buy new equipment, which is essential if South African farmers want to remain internationally competitive. [The price of] a 120 HP tractor has increased by 19% per year over the past five years.”

Local farmers subsidise imported wheat

For many, the most infuriating issue is that local producers are effectively subsidising the transport of lower-quality imported wheat.

Blanckenberg explained that South Africa has imported more wheat than necessary for three consecutive seasons, resulting in the highest carry-over stock in the country’s history.

This is confirmed by a recent Grain SA press release, according to which total wheat imports reached 1,740 million tons in the 2025/26 season, just over 1,84 million in 2024/25, and close to 1,93 million tons in 2023/24, compared with the 10-year average of around 1,67 million tons.

Carry-over stock now stands at 989 899t, far higher than the 650 894t recorded in 2024/25 and the 749 838t seen in 2023/24. The 10-year average is just 553 527t.

In the Western Cape specifically, Blanckenberg said annual imports of about 160 000t have surged by more than 20% to 208 000t this year up to 30 September. This is despite the province producing around one million tons, of which 700 000t stay in the province.

“Practically, this means importers are expanding the surplus, while producers foot the bill through the transport differential, which is based on the cost of transporting wheat from any point to Randburg [Johannesburg], amounting to about R892 if transported from the Western Cape,” he explained.

He added that farmers are aware of trucks moving wheat from the Western Cape to the Free State and returning with irrigated wheat, effectively “raising the price of low-protein wheat and lowering that of high-protein wheat at the farmers’ expense”.

The situation is compounded by the fact that some exporting countries heavily subsidise their producers; Germany, for example, subsidises about 50% of its wheat production.

“We do not care if other countries are subsidised and we are not. All we want is a level playing field through better tariff protection, automatic tariff adjustments, a harvest-time import ban, and the removal of the transport differential,” Blanckenberg stated.

He pointed out that import restrictions are essential between September and January, when imports cause traffic problems, clog silos, and intensify competition for storage.

Too little, too late

The tariff revision, however, will bring little relief now. “We have asked for the tariff to be adjusted upwards by US$10, or roughly R170, per ton to the price of imported wheat, which would have a negligible impact on bread prices.

“But even if it is accepted now, it will be too little, too late, placing pressure on financial commitments,” Blanckenberg said.

Swartland farmer Dirk Lesch said he knows of two producers who have already placed their farms on the rental market due to financial distress.

“This crisis has been building for a long time. Farmers have repeatedly asked government and the value chain for structural changes to improve profitability. We requested a revision of the tariff calculation more than 14 months ago, but nothing has happened,” he said.

Lesch warned that South Africa risks becoming dangerously dependent on wheat imports in an increasingly unstable global environment.

“We saw what happened during [the COVID-19 pandemic]. The same, or worse, can happen again,” he said.

“The geopolitical situation is extremely volatile. There is open tension between Russia and the EU, and if that escalates, even slightly, global wheat flows will be disrupted overnight. Prices will spike, import channels will choke up, and countries that cannot supply themselves will be left exposed.”

Lesch stressed that this is not an alarmist scenario but a realistic one for a country that is already reliant on imports to make up for the shortfall in local production.

“If the wheat industry collapses, communities will collapse. We are not only talking about farmers losing income; we are also talking about food security and the collapse of towns and schools. We have been speaking nicely and pleading, but the time for that is over now,” he concluded.