The Safex price for wheat fell to a low of R5 855/t on Thursday, 23 October. The bad news is that the lower price will have a negative effect on wheat income and profits. Barley and oats are also likely to fetch lower prices, as the prices of these crops are derived from the wheat price, says Johan Lusse, general manager: grain services at Overberg Agri.

By Amelia Genis, Senior Journalist at African Farming and Landbouweekblad

Calculations by agricultural economists from Overberg Agri earlier this year, based on a wheat price of R6 072/t, show a breakeven of 3,11 t/ha at Bredasdorp, 3,19 t/ha at Caledon and 2,66 t/ha at Moorreesburg. These budgets are for high-potential land at Caledon and Moorreesburg, and the yield data comes from average study group figures over the past five years.

“The price is now even lower than it was,” Lusse says. “Multiply that by a yield of 2,5 t/ha, 3 t/ha or 3,5 t/ha, and it has a significant impact on gross income and ultimately on net profit.”

Also read: Update on South Africa’s 2025-26 wheat imports progress

Dry Year Adds to Pressure

In addition, the prospects for good yields in the Overberg and Southern Cape do not look promising.

“The low price, together with the dry year, will put the net profit of all the grain enterprises under pressure. Yield has the biggest impact on the profitability of all the branches,” Lusse says.

By Friday morning, Overberg Agri had harvested about 10% of the expected crop from the Swartland area it serves. “It’s still difficult to say where it will end,” he adds.

In the Southern Cape, 70% of the barley, 8% of the wheat and 20% of the oat crop had been harvested by the same time.

According to Lusse, rainfall from January to September was 40% below the long-term average for the Caledon/Rietpoel area and 35% below average for Bredasdorp/Napier. Between April and September, rainfall was 40% below average for Caledon/Rietpoel and 28% below for Bredasdorp/Napier.

In light of this, yields are expected to be average to below average, Lusse says. Grain quality is also affected, with lower fat kernel percentages in barley and lower hectolitre mass in wheat and oats.

Even so, Lusse expects the Swartland to produce an average harvest, as its rainfall from April to September was only 20% below the long-term average.

Also read: Wheat import tariff does not dictate the price of bread

‘Just Breakeven and Less’

Dreyer van Niekerk of Lemoenskop Boerdery near Caledon says the grading of the small amount of wheat he has harvested so far is better than expected, but the yields are “just breakeven and less”.

“It’s going to be hard to break even with this wheat price,” he says. “We cannot produce wheat sustainably at this price. There is also no hope that the price will rise soon.”