• After maize, wheat is the second most produced food worldwide (rice is third).
  • Wheat is mainly used for human consumption. It can also be used as seed and as animal feed.
  • The grain is a staple food from which bread, biscuits, cake, cereal, pasta, noodles and couscous can be made. It is used for fermentation to make beer, alcohol and vodka (its alcohol can also be used for biofuel).
  • Other non-food uses include the production of absorbing agents for disposable diapers, cosmetics, adhesives and industrial uses such as starch on coatings.
  • The straw can be used as fodder for livestock or as a construction material for roofing thatch. To a limited extent, wheat is planted as a forage crop.
Source: A Profile of the Wheat Market Value Chain (see "Websites & publications" heading)

International business environment

  • The top producers of wheat are EU, China, India, Russia, Canada and Ukraine (USDA, 2021).
  • The top exporters of wheat, flour and products are Russia, Canada, Australia, Ukraine and Argentina (USDA, 2021).
  • The top importers are Egypt, Indonesia, Turkey, China and Algeria (USDA, 2021).
  • South Africa remains the largest wheat producer in Sub-Saharan Africa after Ethiopia.

 

Further reading:

 

South Africa: imports and exports

  • South Africa remains a net importer of wheat, with just under 1.5 million tonnes of wheat expected to have been imported in the marketing season which ended in September 2021 (BFAP, 2021). The major suppliers have been Australia (32.5%), Poland (15.8%), Lithuania (17.7%), Russia (11.5%) and Canada (9.6%) (SAGIS, 2021).
  • South Africa also exports wheat to nearby countries in the Southern Africa region and acts as a conduit for grain imported from outside the region (USDA, 2020).
  • The reference price that triggers the variable import tariff was dropped from 294 USD per tonne to 279 USD per tonne in mid-2017. Support for local producers is also lowered by the Economic Partnership Agreement (EPA) with the European Union which allows a quota of 300 thousand tonnes that can be imported free of this duty from the EU (BFAP, 2020).

 

 

Local business environment

Wheat is planted mainly between mid-April and mid-June in the winter rainfall area (Western Cape) and between mid-May and the end of July in the summer rainfall area (eastern Free State).

The wheat marketing season in South Africa commences on 1 October and ends on 30 September the following year. In a bid to protect the local industry, tariffs on imported wheat apply (see “South Africa: imports and exports” under the previous heading).

Because imports make up half of South Africa’s wheat requirements, the price farmers get for their crop is tied to import parity (and so exchange rate and world price levels play a crucial role).

The impact of the Rand depreciating (as in 2020 following the Moody’s downgrade of South Africa’s credit rating and COVID-19) is an increase in bread and wheat flour prices.

 

Notes from the 2021-2030 BFAP Baseline

  • For the first time since 2011 the South African wheat crop breached the 2 million tonne mark in 2020, taking the gross production value to well over R10-billion.
  • What is remarkable in this achievement is that the 2020 crop came from a total area planted of only 509 000 hectares, compared to the 604 000 hectares of wheat that was planted in 2011. This implies that the average yield potential has grown considerably over the past decade, which can be attributed to significant investments in focused breeding programmes on the back of a new grading system, as well as improved farming practises involving conservation tillage and more rotational cropping.
  • One negative factor from the large crop was the overall quality. According to the South African Grain Laboratory’s Wheat Quality Report for the 2019/20 season, 32% of the crop was downgraded to “class other wheat”, a feed grade equivalent. The downgrade was not due to insufficient protein content, but rather due to other grading criteria such as the percentage screenings that exceeded the maximum allowable deviation level of 3% (<1.8mm sieve) and falling numbers that were below the 220 seconds threshold.

 

Suggested reading:

  • Statistics (e.g. crop estimates, export/import etc) and presentations may be found on the South African Grain Information Service (SAGIS) and the Department of Agriculture, Land Reform and Rural Development (DALRRD) websites, www.sagis.org.za and www.dalrrd.gov.za.
  • Previously the DALRRD Directorate Marketing published an annual Wheat Market Value Chain Profile on its web pages at www.dalrrd.gov.za. Check if these have resumed.
  • Wheat crop reports can be found on the Southern Africa Grain Laboratory website, www.sagl.co.za.
  • Find the Grading Regulations for wheat and requirements for grain exports at http://agbizgrain.co.za.

For the newcomer

Find details of the Wheat production guideline document available from DALRRD and other grower notes under the “Websites & publications” heading. Under the same heading, read the ANA article (2019, November) about fifty-seven farmers’ successful participation in the Baphuduhucwana Production Incubator (BPI) scheme in North West province.

As a regular wheat importing country, South Africa and its wheat industry is fully integrated into the global wheat market which has become increasingly concentrated and sophisticated, and many variables need to be taken into consideration. Exchange rate fluctuations, for example, make it a challenge for even the most sophisticated farmers to plan effectively and to be profitable. SAFEX is a good tool to help hedge against exchange rate risk, but the minimum quantities required to trade on SAFEX make it less applicable for small emerging farmers. While transformation of the industry is important for its long-term sustainability in South Africa, this transformation has to happen in an economically viable way. It is not appropriate to encourage primarily subsistence level farmers to invest their scarce resources in what is at present a declining industry. It is almost certainly better to help the larger, more sophisticated emerging commercial farmers to enter the industry in a viable manner.

Source: adapted from a report commissioned by the Wheat Forum investigating the potential entry and successful participation of emerging black farmers into wheat production. Contact the Wheat Forum (details under "Role players" heading).

Agricultural Research Council’s Small Grains (ARC-SG) has a very active Farmer Support Programme, and they have many projects running with the emerging farmer in mind. It runs a three-day wheat production course, specifically for students and extension officers working with emerging farmers.

National strategy and government contact

The Agricultural Policy Action Plan (APAP) from the last decade noted some points which still apply:

  • Wheat has a low labour multiplier, and production costs are presently high.
  • The main rationale for seeking to revive the wheat sector is to ensure less dependence on imports, which contributes to volatility in consumer prices and has hurt traditional wheat growing areas.
  • At the time, wheat farmers employed around 28 000 people. Supporting this sector could see a further 8 000 employed.
  • The number of wheat producers was estimated to be between 3 800 and 4 000, predominately white commercial farmers. There was space for transformation.
  • The Western Cape is the country’s greatest wheat producer, yet a lot of this wheat is transported to Gauteng and beyond, and so transport costs detract from the profitability of this crop. Reducing bulk transport costs by progressively increasing use of rail was also essential. A further intervention would be to increase milling capacity in the Western Cape.

The South African Cultivar & Technology Agency NPC (SACTA) was established in 2016 to administer the breeding and technology levy and will make payments to the seed companies from funds collected by means of the levies. This is to encourage more cultivars and greater investment in the market.

 

Proponents believe producers will gain from the SACTA measures because yields will be higher. There will be more locally produced wheat. Higher volumes of local wheat production will lead to less imports and thus less tariff payments, a counter to increased food inflation. Visit www.sactalevy.co.za.

Role players

 

Associations

 

Training and research

The Winter Cereal Trust is responsible for the allocation of funding and appraisal of relevant research projects in the winter grain industry. Since 1998, statutory levies on sales of winter cereal have been imposed to finance the Winter Cereal Trust. The Agricultural Research Council’s Small Grains campus in Bethlehem conducts the research on wheat and other winter grains.

  • ARC-Small Grains (ARC-SG) Training is done on demand: should somebody be interested, the ARC-SG puts together a programme. In addition to training, the ARC-SG carries out a number of other services e.g. plant analysis, they run a wheat quality laboratory etc. Find details on www.arc.agric.za.
  • Grain SA www.grainsa.co.za Included in its Farmer Development Programme is a week long introduction to producing wheat.
  • Grain Training Institute www.gtionlinetraining.co.za
  • Southern African Grain Laboratory (SAGL) www.sagl.co.za
  • Stellenbosch University (i) Department of Agronomy Tel: 021 808 4803/5 www.sun.ac.za (ii) Department of Food Science www.sun.ac.za/foodsci
  • University of the Free State Department of Plant Sciences www.ufs.ac.za/plantsci

 

Companies involved

For an extensive list go to www.sagis.org.za – take the “List of Co-workers” and then “Wheat” menu options.

Websites and publications

Visit websites listed earlier on this page.

  • The ARC-SG has the following publications: (i) Wheat Diseases in South Africa (ii) Field guide for the identification of wheat insects in South Africa (iii) Guidelines for the production of small grains in the summer rainfall region (iv) Guidelines for the production of small grains in the winter rainfall region. The Guidelines for the production of small grains in the summer rainfall region and Guideline for the production of small grains in the winter rainfall region are highly comprehensive and essential publications. Topics include management of wheat production (e.g. reaching target yields), soil tillage guidelines, cultivar choice guidelines, fertilization guidelines, and weed and insect control. For the above publications, visit www.arc.agric.za.
  • Order online at www.arc.agric.za, or call 012 842 4017 for the following publication, available from the ARC Agricultural Engineering: Agro-processing of Cereal Crops Vol. 2 (Sorghum, wheat).
  • 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.
  • The AgriSETA Learner Guide Primary Agriculture “Harvesting agricultural crops” can be found at www.agriseta.co.za/downloads/LearningMaterial/116201_LG.pdf
  • Find the Pannar Wheat Production Guide at www.pannar.com.
  • Check whether the DALRRD‘s Directorate Marketing has resumed publishing the annual A Profile of the Wheat Market Value Chain under “Annual publications” on its web pages at www.dalrrd.gov.za. Also available on this website are the Technical Manual: Karnal Bunt of Wheat and Wheat production guidelines.
  • Find the wheat option at www.sagl.co.za, website of the Southern African Grain Laboratory (SAGL). Options cover national wheat crop and other reports.
  • Watch “Nasie in Gesprek besoek die koringbedryf” (June 2018) on YouTube.

 

Some articles

 

A Wheat Museum – “one of the only three of its kind in the world where the history of wheat is depicted” – can be visited in Morreesburg (Western Cape). Call 022 433 1093 or take a look at www.moorreesburgtourism.co.za/wheat-industry-museum/.

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