Grain SA has warned that South African wheat producers are being hammered by a perfect storm of rising costs and falling prices, with the industry organisation cautioning that local production could collapse without urgent intervention.

By Maile Matsimela, Digital Editor at African Farming

The sustainability of South Africa’s wheat industry is hanging by a thread, according to a press release issued by Grain SA this week. The organisation has sounded the alarm that current market conditions have become completely unsustainable for local producers, with chairperson Richard Krige calling for immediate intervention from government, the entire value chain and consumers to prevent what could be an irreversible collapse of local wheat production.

Farmers Caught in a Cost-Price Squeeze

According to Grain SA, wheat farmers are facing production costs of around R16 000 per hectare whilst struggling to achieve the break-even point of 3.4 tonnes per hectare. The organisation states that this dire situation has been exacerbated by suppressed international wheat prices and insufficient market protection for local producers.

Also read: Low wheat price also affects barley and oats

“The current market conditions are completely unsustainable for our wheat farmers,” said Krige. “Without immediate action, we’re looking at the real possibility of local wheat production scaling down irreversibly, which would threaten the survival of the entire industry.”

The Real Cost of Bread – And Who Bears It

According to Grain SA, wheat accounts for only 18% of the cost of a loaf of bread, meaning that increases in wheat prices wouldn’t significantly impact what consumers pay at the till. The organisation revealed that “from a loaf costing R17.92, the farmer receives a mere R3.23” – highlighting just how little of the retail price reaches producers.

Grain SA states that the industry supports approximately 12 600 jobs, with 73% of these positions located in the Western Cape. The organisation notes that this figure doesn’t even include additional employment created by other value chain partners, such as input suppliers, silo operators and logistics providers.

In their statement, Grain SA warned that should local wheat production collapse, “consumers could end up paying up to R643 million more annually to maintain the same quality of bread” – a cost that, according to the organisation, far exceeds supporting local farmers through proper market mechanisms.

Import Tariff Provides Some Relief

Some relief came on 27 November 2025 when an import tariff of R616 per tonne was triggered, with the Government Gazette process activated through SAGIS (South African Grain Information Service). However, Grain SA notes that this is only a temporary measure.

The organisation revealed that Grain SA and SACOTA (South African Cereals and Oilseeds Trade Association) had applied to ITAC (International Trade Administration Commission) in June 2024 for an adjusted reference price and automatic trigger mechanism, but this application is still awaiting finalisation.

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

Five Critical Interventions Needed

In the statement, Grain SA has identified five priority areas that require urgent intervention:

Improved Import Tariff System
The organisation is calling for “an adjusted reference price and automatic trigger mechanism” to provide better protection for local producers against unfair international competition.

Harvest-Time Import Restrictions
Grain SA says restrictions on imports during local harvest periods are essential to “prevent large volumes of imports from artificially suppressing local prices” when farmers are trying to sell their crops.

Modern Genetic and Production Technologies
According to the organisation, South Africa needs “updated regulations for new breeding techniques”, and white wheat should be included in the national basket to promote diversification and yield stability.

Production Support and Risk Management
Grain SA states that farmers need access to “subsidised crop insurance and a fairer location differential system on SAFEX” to manage production risks more effectively.

Restoration of Transport and Logistics
The organisation argues that inefficient transport and logistics systems are adding unnecessary costs that are borne by both producers and consumers, and these systems need urgent attention and improvement.

The Bigger Picture

According to Grain SA, the wheat industry’s struggles reflect broader challenges facing South African agriculture. The organisation states that rising input costs, inadequate infrastructure and competition from imports are creating an environment where local production is increasingly unviable.

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“If our producers fail, the entire value chain and rural economies will suffer, and ultimately, it’s the consumers who will bear the cost,” warned Krige.

Grain SA emphasises that the situation requires a coordinated response from all stakeholders. The organisation argues that government intervention through improved tariff systems and policy support is crucial, but the entire value chain, from input suppliers to retailers, needs to recognise the value of supporting local production.

Time Running Out

With harvest season approaching and international market conditions remaining challenging, Grain SA warns that time is running out for South African wheat farmers. The organisation states that the industry has reached a tipping point where decisive action is needed to prevent what they describe as “a real threat of collapse”.

The irony is stark: Whilst consumers enjoy Black Friday specials on everything from electronics to clothing, the farmers who help put bread on their tables are getting no deals whatsoever – just mounting costs and dwindling returns.

According to Grain SA, without urgent intervention, South Africa risks joining the ranks of countries that have lost their food security through the collapse of domestic agriculture. The organisation warns that the consequences would extend far beyond the farming community, affecting food prices, rural employment and the country’s ability to feed itself.