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.
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, the EU and Argentina (USDA, 2021).
- The largest exporters of maize are the USA, Argentina, Brazil and Ukraine (USDA, 2021).
- Top importers are the China, Mexico, EU, Vietnam and South Korea, (USDA, 2021).
- 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.
- The SADC Secretariat and German Development Corporation‘s Profiling of the Regional Agro-Processing Value Chains in the SADC Region (March 2019) includes a look at maize.
- 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” chapter).
South Africa: exports and imports
Find the latest presentation and other information on the SAGIS website, www.sagis.org.za.
- Maize is exported mainly to African countries: some 70% of white maize went to Botswana, Ethiopia, Namibia and Mozambique; yellow maize to Eswatini, Botswana, Namibia and Mozambique accounted for some 86% of yellow maize exports (SAGIS, 2020).
- South African exports to Southern African countries face increased competition from Zambia which produces non-GM maize and enjoys a more favourable transport differential than SA (BFAP, 2020).
- 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 under “Annual publications” on the Directorate Marketing web pages at www.dalrrd.gov.za).
- The biannual ABSA Agricultural Outlooks are recommended reading.
- Find the presentation “Monitoring biosecurity for the Grain Value chain” by Dr Marinda Visser (Grain SA) at www.agbizgrain.co.za/uploads/documents/Events/Mini%20Symposium%202017/Marinda%20Visser,%20Grain%20SA.pdf
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 produced throughout South Africa with Free State, Mpumalanga and North West provinces being the largest producers, accounting for over four-fifths of total production. 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.
- The ratio between human consumption vs animal feed, white maize vs yellow maize, is changing for a number of reasons: (i) Maize production becoming less profitable in the western parts of the country, where most of the white maize is grown (ii) Yellow maize being easier to trade globally, the prices less volatile than for white maize (BFAP, 2020).
- Favourable weather conditions and a 14 percent increase in area cultivated to maize has resulted in an expected maize crop of 15.5 million tonnes for 2020, the second largest in history and a 38 percent year on year increase in production volume (67% for white maize and 10% for yellow maize). This will also ensure that maize meal – the core staple to the bulk of South Africa’s population – remains affordable (BFAP, 2020).
- 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).
- Recent drought conditions (2013, 2015, 2016 and 2019) too, have led to more frequent financial losses and debt carry-over. Farmers have looked for alternatives – cotton, soybeans, cash crops, fodder production and increasing income from livestock (BFAP, 2019).
- The gross producer value (GPV) for maize production is expected to increase from an estimated R30 billion in 2019 to almost R44 billion in 2022, which should allow producers to decrease their levels of debt (Absa, 2019).
- Improved maize yields over time are attributed to precision farming, mechanisation and improved seed varieties. However, South African farms are less competitive than major international role players on a cost of production basis, mainly due to lower yields and the high cost of selected inputs (BFAP, 2018).
- 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).
- The local consumption requirements for maize were 10 299 680 tons in the 2017/18 year (SAGIS, 2018).
- 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 Agricultural Outlook 2020-2029, 2019-2028 and 2018- 2027; ABSA Agricultural Outlook Autumn Edition 2019.
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”.
Market value chain
The maize market value chain can be broken down into the following levels:
|Primary||Input suppliers |
Animal feed manufacturers
|Tertiary||Traders (hedgers, arbitrageurs and speculators) |
Transporters (used throughout the chain)
Useful references and documents
- Find the annual Maize Market Value Chain Profile under “Annual publications” on the Directorate Marketing web pages 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 one (take the “Branches” and “Administration” menu options), www.dalrrd.gov.za.
- Find the standard contract format for the transport of grain in Southern Africa at www.grainmilling.org.za.
- Issue 76 (February 2019) of the DALRRD-NAMC TradeProbe looked at the effects of the fall army worm invasion and its effects on South Africa’s maize industry.
Grower points of interest
Options for when there is a maize surplus and prices are low
“There are still a lot of unexplored opportunities in the secondary maize industries e.g. ethanol production and protein extraction. If we invest in the downstream maize industries, we can retain our competitiveness in the grain sectors”, believes Andrew Makenete.
What are the options of using your harvested maize profitably?
- Store the grain until the prices are better (see the “Grain storage and handling” chapter).
- Clean the grain, bag it and market it to small maize buyers. Giving them exactly what they want can earn you a premium price. This can include neighbouring livestock farmers, informal traders or those wanting it for household use.
- Use it for your own livestock.
- Diversify into a small, on-farm milling operation of your own Long term solutions.
- Hedge your prices.
- Plant 50% less maize.
- Buy (and store) maize instead of planting it! Find the articles on www.landbou.com “Moenie mielies plant: koop jou oes” [Don’t plant maize: buy your harvest] and “Moenie mielies plant: Koop oes (deel 2)”.
- Plant other crops like groundnuts, soybeans or cowpeas. The latter, as a legume, fixes nitrogen in the soil benefiting follow-up crops. Cowpea can be grazed, baled or turned into silage.
- Diversify into livestock production.
The Maize Trust and assistance to emerging maize farmers
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).
- There are approximately 3 600 black farmers in the Grain SA study groups and 58 farmers in a 250 ton maize club. More than 120 black farmers are serviced currently as part of an advanced farmer project within the Development Programme of Grain SA.
- 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.
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.
Source: Maize Trust. Interested parties are invited to contact the administrators of the Trust, L & L Agricultural Services. Call 012 807 3958 or e-mail at l-lagric [at] mweb.co.za.
Contacts for the Grain SA Development Programme:
Find details of training programmes and regional contacts at www.grainsa.co.za/pages/farmer-development/training.
- Reporter. 2018, July 26. “E-Cape to export maize to Vietnam”. SA News. Available at www.sanews.gov.za/south-africa/e-cape-export-maize-vietnam
- The BFAP Baseline 2017-2026 did an investigation into the question “Maize production – How small is big ‘enough’?” (pp 34-36). Find the document at www.bfap.co.za.
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 “Branches” menu option).
Find the DALRRD web page on Fall Armyworm (FAW) at www.dalrrd.gov.za/Branches/Agricultural-Production-Health-Food-Safety/Food-Import-Export-Standards/Fall-armyworm
In terms of growth in gross value of production (2013-2017) and share of total agricultural production value (2013-2017), DALRRD (2018) – now DALRRD – placed green mealies and sweetcorn in the top 10 agricultural products.
In a November 2017 report, DALRRD said that it was working with the different grain commodity organisations to develop a suite of financial models (production, processing and Research and Development) with state guarantees/incentives. Included was a plan to formalise the integration of smallholder farmers in the grains value chain through South African Futures Exchange 10-ton Black Economic Empowerment White Maize contracts for smallholder farmers producing grain (Parliamentary Monitoring Group, 2017). See https://pmg.org.za/committee-meeting/25488/. Any developments?
One of ten “Sectoral interventions” suggested in the Agricultural Policy Action Plan (APAP) is in the “Poultry/soya beans/maize integrated value chain”. It was envisaged that supporting the yellow maize sector would help keep animal feed costs down. This was to be done through “more targeted technical and input assistance, and encouraging stronger linkages between commercial and smallholder farmers, and feed companies via efficient market intermediaries such as cooperatives” (page 26). Maize also plays a role in animal feed for intensive beef production (feedlots).
Both the APAP and previous BFAP Baselines (2018, 2015) touched 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? Find the Agricultural Policy Action Plan (APAP) discussion on this on the “Fertiliser” page.
- Agbiz Grain Tel: 012 807 3002 www.agbizgrain.co.za
- Animal Feeds Manufacturing Association (AFMA) Tel: 012 663 9097 www.afma.co.za
- Grain SA (GSA) Tel: 0860 047 246 www.grainsa.co.za
- Maize Trust Tel: 012 807 3958 www.maizetrust.co.za The Board of Trustees ensures that the income derived from assets of the Maize Trust is utilised for the benefit of the whole maize industry. Find the earlier heading “The Maize Trust and assistance to emerging maize farmers”. The Trust also annually grants approximately 12 bursaries for maize related MSc and PhD studies to qualifying students at all the South African Universities, of which at least 50% is from disadvantaged communities.
- National Chamber of Milling / Grain Milling Federation Tel: 012 663 1660 www.grainmilling.org.za
- South African Cereals and Oilseeds Trade Association (SACOTA) Tel: 012 663 9097 www.sacota.co.za
- South African Grain Information Service (SAGIS) Tel: 012 941 2050 www.sagis.org.za
- South African Grains Farmer Association (SAGRA) Tel: 012 111 9812 http://sagra.africa
See previous heading.
Training and research
- ARC-GC (Grain Crops) Tel: 018 299 6100 www.arc.agric.za In addition to research, ARC-GC provides short courses to farmers which cover soil preparation; fertiliser requirements; weed, pest, disease management; production practices of maize.
- Agricultural Colleges and Universities offering agricultural qualifications do research and training in maize production. Find their details in the “Agricultural education and training” article.
- AgriSETA accredited providers offer training on maize production. Examples include: (i) Agriskills Transfer Tel: 012 460 9585 www.agriskills.net (ii) Buhle Farmer’s Academy Tel: 087 803 0563 www.buhle.org.za (iii) NOSA Agri Tel: 087 286 9298 www.nosaagri.co.za (iv) Skills for Africa Tel: 012 379 4920 www.skillsafrica.co.za
- Grain Training Institute Tel: 071 312 7413 www.gtinstitute.co.za
- Southern African Grain Laboratory (SAGL) Tel: 012 807 4019 www.sagl.co.za
- The Syngenta Grain Academy is a partnership between Syngenta and the University of the Free State’s Business School. Call 082 574 2272 or visit http://grainacademy.co.za.
- AMT Tel: 073 140 2698 www.amtrends.co.za
- Bureau for Food and Agricultural Policy (BFAP) www.bfap.co.za The annual BFAP Baseline Agricultural Outlook covers the prospects for maize extensively. See also their 2017 study Adding value in the South African maize value chain.
- Southern African Grain Laboratory (SAGL) Tel: 012 807 4019 www.sagl.co.za Accredited [ISO 17025] as the reference laboratory for the grain and oilseed industries in Southern Africa.
Grain storage and marketing
Websites and publications
- 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 (find it on the Directorate Marketing web pages) and grower guides (find the “InfoPaks” and “Brochures & grower guides” options under the Resource Centre option). The 5th in the series Agricultural Marketing Extension Training Papers deals with field crop marketing with an emphasis on maize.
- 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-PPR (Plant Protection Research) 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”.
- Find the Nation in Conversation overview of the maize industry (April 2017) on YouTube.
- Find the “Technical information” option 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 at l-lagric [at] mweb.co.za.
- Find the Prospectus on the South African Maize Industry at www.sacota.co.za.
- Learning material is available from NOSA Agricultural Services. Visit www.nosaagri.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.
- 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/
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