Introduction
Maize (Zea mays L.) is the most important grain crop in South Africa and is produced throughout the country under diverse environments. See fuller discussion under “Local business environment” heading.
Successful maize production depends on the correct application of production inputs that will sustain the environment as well as agricultural production. These inputs are, inter alia, adapted cultivars, plant population, soil tillage, fertilisation, weed, insect and disease control, harvesting, marketing and financial resources.
In developed countries, maize is consumed mainly as second-cycle produce, in the form of meat, eggs and dairy products. In developing countries, maize is consumed directly and serves as staple diet for some 200 million people. Most people regard maize as a breakfast cereal. However, in a processed form it is also found as fuel (ethanol) and starch. Starch in turn involves enzymatic conversion into products such as sorbitol, dextrine, sorbic and lactic acid, and appears in household items such as beer, ice cream, syrup, shoe polish, glue, fireworks, ink, batteries, mustard, cosmetics, aspirin and paint.
Source: http://www.arc.agric.za/arc-gci/Fact%20Sheets%20Library/Maize%20Production.pdf (page 3)
International business environment
- With strong demand for maize from food companies, livestock producers and ethanol makers, American maize (corn) production is considered a critical component in global supply and demand. The USA is the largest producer of maize, followed by China, Brazil, EU, Argentina and India (USDA, 2024). South Africa is at position 9.
- The largest exporters of maize are USA, Brazil, Argentina, Ukraine, Russia, the EU, and South Africa (USDA, 2024).
- Top importers are the China, Mexico, EU, Japan, Vietnam, and South Korea (USDA, 2024).
Further reference:
- The annual Bureau for Food and Agricultural Policy (BFAP) Baseline includes an overview of the global maize situation and trends. Find it at www.bfap.co.za.
- Maize (corn) is included in the “Grain: World Markets and Trade” circular available from the United States Department of Agriculture (USDA). Statistics of global role players (countries) are listed. Production, consumption, exports etc are looked at. This circular is available on the Foreign Agricultural Service Home Page. The address is https://apps.fas.usda.gov/psdonline/circulars/grain.pdf.
- Visit the National Corn Growers Association (USA) website – www.ncga.com.
- The maize price is determined by the prices of the Chicago Board of Trade (CBOT) – www.cmegroup.com (refer also to the “Commodity trading” page).
South Africa: exports and imports
- South Africa is the world’s ninth largest maize exporter.
- In the 2023/24 marketing year, exports amounted to 3,4 million tonnes. About 63% of the exported maize was yellow, 37% was white maize.
- Zimbabwe accounted for 18%, Botswana 9%, Mozambique 6%.
- Other markets for South African maize exports included South Korea (14%), Japan (13%), Taiwan (13%), and Vietnam (5%).
Source: Wandile Sihlobo, Agbiz newsletter 14 May 2024
Further reference:
- Find the latest presentation and other information on the SAGIS website, www.sagis.org.za.
- An analysis of South African imports and exports is given in the annual Department of Agriculture, Land Reform and Rural Development (DALRRD) Maize Market Value Chain Profile (find it on the Directorate Marketing web pages under the “Old website” option) at www.dalrrd.gov.za.
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Understanding the Economics of the Maize Industry
The maize market is an open and deregulated market. What you get for your crop is very much what the market prices at the time are.
A number of factors influence what this price is:
- The international price of maize. People want to save money. If they can buy maize from somewhere else at a price lower than yours, they will do so.
- The current exchange rate. The balance between the South African rand and the American dollar might make it a bad idea for a miller to buy your maize when he could be getting it cheaper somewhere else. This is the reason why the exchange rate is watched with great interest.
- Local production (influenced by weather conditions and hectares planted to maize). If there is not a lot of maize around, you will have many people wishing to buy your maize and so the price you get will be higher.
- Local consumption of maize. If the demand for maize were to drop, then not that many people would be wanting to buy your maize and you would have to settle for a lower price.
- Production levels in the SADC region (South Africa is usually the main source of white maize for these countries in times of shortage). If a lot of maize has been produced, then the people who buy it will be able to buy from elsewhere if you are wanting too much for yours.
- Stock levels (both domestically and internationally). How much maize is available? In times of surplus, the price of maize is closer to export parity, whilst in times of shortages the price of maize will be closer to import parity. It should be emphasized that information on outlook and trends of the fundamental factors influence market perceptions of traders which eventually affect the price levels. Credible and timely information, especially on crop estimates, stock levels, imports and exports, is therefore critical for the proper functioning of the market.
Local business environment
Maize is the most important grain crop in South Africa, being both the staple food for the majority of the South African population and the major feed grain. Most of the maize produced in South Africa is consumed locally; as a result, the domestic market is very important to the industry.
- Maize is produced throughout South Africa with Free State, Mpumalanga and North West provinces being the largest producers, accounting for four-fifths of total production (DALRRD, 2024). Maize is produced mostly on dry land with less than 10% produced under irrigation.
- White maize is primarily for human consumption. Yellow maize is the most important ingredient in feed rations for dairy, beef, poultry and egg production. When the price of white maize falls below that of yellow maize, then white maize can also be used for animal feed (BFAP, 2024).
- The ratio between human consumption vs animal feed, white maize vs yellow maize, is changing for a number of reasons: (i) Maize production is becoming less profitable in the western parts of the country, where most of the white maize is grown (ii) Yellow maize is easier to trade globally, the prices less volatile than for white maize (BFAP, 2024).
- Maize is planted mainly between mid-October and mid-December. The rainfall pattern and other weather conditions of a particular season determine the planting period as well as the length of the growing season. This planting window is coming later than in previous years, and the period is shorter, placing pressure on farmers (BFAP, 2019).
- The maize industry is important to the economy both as an employer and earner of foreign currency because of its multiplier effects (maize also serves as a raw material for manufactured products such as paper, paint, textiles, medicine and food).
- South Africa consumes around 12,0 million tonnes and harvests around 13,2 million tonnes (Sihlobo, 2024).
- The maize marketing season in South Africa commences on 1 May and ends on 30 April the following year.
Source: Maize Market Value Chain Profile (Department of Agriculture, Land Reform and Rural Development; BFAP Baseline Agricultural Outlooks 2024-2033, 2023-2032, 2022-2031, 2021-2030, 2020-2029, and 2019-2028; Wandile Sihlobo, Agbiz newsletter 14 May 2024.
Market value chain
The maize market value chain can be broken down into the following levels:
| Sector | Role players |
| Primary | Input suppliers Producers Silo owners |
| Secondary | Millers Animal feed manufacturers |
| Tertiary | Traders (hedgers, arbitrageurs and speculators) Retailers Transporters (used throughout the chain) |
Further reference:
- Find the annual Maize Market Value Chain Profile on the Directorate Marketing web pages (under the “Old website” option) at www.dalrrd.gov.za. Much of the information from the “Local business environment” heading is drawn from there.
- The annual Bureau for Food and Agricultural Policy (BFAP) Baseline includes a look at the domestic maize market situation.
- Find the maize information (including crop quality, production regions and maps and much more) on www.sagl.co.za.
- Find the Grading Regulations for maize and requirements for grain exports at http://agbizgrain.co.za.
- Statistics (e.g. crop estimates, export/import etc) may be found on the South African Grain Information Service website – www.sagis.org.za – and on the National Department of Agriculture’s, www.dalrrd.gov.za.
- Find the standard contract format for the transport of grain in Southern Africa at www.grainmilling.org.za.
For the Newcomer
The Maize Trust currently funds most of its transformation projects through the Farmer Development Programme of Grain SA and by means of the Grain Farmer Development Association (GFADA). Over and above the funding granted by means of GFADA and Grain SA, the Trust also funds transformation projects through projects of the Agricultural Research Council. Find details at https://maizetrust.co.za.
GFADA assists black emerging farmers by paying for, inter alia, soil correction, comprehensive crop insurance and the costs of mentors to assist the farmers for a five year period or longer. By not being limited to funding for one commodity only, GFADA has the added benefit of crop rotation opportunities for the farmers.
Information on the Grain SA Development Programme (including contact details for training courses) are at www.grainsa.co.za/pages/farmer-development.
National strategy and government contact
Find contact details and information on the different directorates at the Department of Agriculture, Land Reform and Rural Development (DALRRD) at www.dalrrd.gov.za (take the “Core business” menu option).
BFAP Baselines regularly touch on the comparatively high cost of fertiliser in South Africa, making the cost of producing maize under dryland conditions in South Africa is significantly higher, compared to leading global producers. When you import something like fertiliser, a host of other costs kick in: the exchange rate, deep sea freight rates, unloading- and administrative cost at ports and inland transportation. What can be done about this?
Role players
Further reference:
Government
- See previous heading.
Training and research
- Agricultural Colleges and Universities offering agricultural qualifications do research and training in maize production. Find their details on the “Agricultural education and training” page.
Inputs
- Find the “Seeds & seedlings”, “Fertiliser”, “Speciality fertilisers”, “Crop protection” etc pages.
Grain storage and marketing
- Refer to the “Grain storage & handling” and “Commodity trading” pages.
The details of many other role players can be found on related pages of this website e.g. “Grain storage and handling”, “Animal feeds”, “Milling” and “Small and micro milling”.
Websites and publications
Visit the websites listed earlier on this page e.g. www.grainsa.co.za and www.sagis.org.za.
- Several publications and documents relating to maize can be found on the website of the DALRRD, www.dalrrd.gov.za. These include the Maize Market Value Chain Profile and grower guides. The 5th in the series Agricultural Marketing Extension Training Papers deals with field crop marketing with an emphasis on maize.
- Find the DALRRD web page on Fall Armyworm (FAW) on its website.
- The CD Production of maize, diseases and pests and the Maize Information Guide (MIG) are two comprehensive information sources, available from ARC-GC. This can be downloaded at www.arc.agric.za. Alternatively, contact the ARC-GC at 018 299 6100.
- CD Roms from the ARC-PHP (Plant Health and Protection) include: (i) Crop Pests, Vol. 4: Field Crops and Pastures Pastures (ii) Medically Important Spiders And Scorpions Of Southern Africa. Write to booksales [at] arc.agric.za or infopri [at] arc.agric.za.
- Order online at www.arc.agric.za, call 012 842 4017 or send an email to stoltze [at] arc.agric.za for the following publications, available from the ARC Agricultural Engineering: Agro-processing of Cereal Crops Vol. 1 (Maize, oats, rice).
- Consult the AgriSETA Learner Guide Primary Agriculture “Harvesting agricultural crops”.
- BFAP undertook a study for the Maize Trust related to the potential of the domestic value chain to grow and diversify the production of value added goods. Refer to the report “Adding Value in the South African Maize Value Chain”.
- Find technical information under “Products” on the Pannar website at www.pannar.com. “Maize Production Manual – Know the Maize Plant (SA)” is a comprehensive booklet that guides one from the time of planting through to harvesting.
- The results of maize research projects that were funded by the Maize Trust are available from the Administrators of the trust. See www.maizetrust.co.za.
- Find the Prospectus on the South African Maize Industry at www.sacota.co.za. .
- The Water Efficient Maize for Africa (WEMA) project – http://wema.aatf-africa.org
- www.sagl.co.za – read about national crop quality and other national projects on the Southern Africa Grain Laboratory website.
- Find the Nation in Conversation overview of the maize industry (April 2017) on YouTube.
Some articles:
- Majola G. 2024, April 29. “El Niño drought not a crisis for food basket but for white maize: analysts”. Business Report. Available at www.msn.com/en-za/news/other/el-ni%C3%B1o-drought-not-a-crisis-for-food-basket-but-for-white-maize-analysts/ar-AA1nQqaa
- Reporter. 2024, April 24. “FAO issues warning on southern Africa maize shortfall”. Bizcommunity. Available at www.bizcommunity.com/article/fao-issues-warning-on-southern-africa-maize-shortfall-897043a#
- Ripley B. & Vetter S. 2022, April 28. “Rising atmospheric CO₂ may benefit maize crops: first experiment in African conditions”. The Conversation. Available at https://theconversation.com/rising-atmospheric-co-may-benefit-maize-crops-first-experiment-in-african-conditions-181497
- Dempsey P. 2021, July 31. “Striving for optimal maize yields”. Farmer’s Weekly. Available at www.farmersweekly.co.za/crops/field-crops/striving-for-optimal-maize-yields/
- Dean S. 2020, March 2. “Consistent quality ensures success for popcorn exporter”. Farmer’s Weekly. Available at www.farmersweekly.co.za/agri-business/agribusinesses/consistent-quality-ensures-success-for-popcorn-exporter/
- Du Toit, M. 2019, July 4. “We’ve moved from pap to umdoko, says KwaZulu-Natal small scale farmer”. Food for Mzansi. Available at www.foodformzansi.co.za/weve-moved-from-pap-to-umdoko-says-kwazulu-natal-small-scale-farmer/
