Grain farmers, especially winter grain producers, may need to harvest about 1 tonne per hectare more to service their overheads due to rising input costs.
By Alani Janeke, senior journalist at African Farming and Landbouweekblad
If the war launched by the United States and Israel against Iran continues for a long time, grain farmers in the winter rainfall region may need to harvest an additional 1 tonne per hectare to cover the expected increase in production input costs, according to calculations by the Bureau for Food and Agricultural Policy (BFAP).
Grain SA has been engaging with service providers since the second week of March about the issue of higher input costs for farmers. The organisation has sent a letter to the Fertilizer Association of Southern Africa, among others, urging its members not to exploit the situation.
This followed reports of fertiliser suppliers in the Western Cape suddenly increasing prices on products that had reportedly already arrived in South Africa or were already at sea when the war broke out.
Corné Louw, head of applied economics and member services at Grain SA, says the organisation also engaged with fuel companies to request that they ensure sufficient fuel would be available for the agricultural sector in light of planting and harvesting season approaching in various parts of the country.
Grain SA, in cooperation with BFAP, presented a session for winter grain farmers on Monday, 23 March, on what may lie ahead in the coming season, particularly amid the severe uncertainty the war is creating in global markets.
Also read: Free State Agriculture warns against diesel price manipulation amid global fuel tensions
International Economy Remains Resilient
Dr Tracy Davids, a director at BFAP, said although the global economy has repeatedly been destabilised by major international events since 2020, it is encouraging to see that it is recovering faster than usually expected.
Volatility began in earnest during the Covid-19 pandemic in 2020. “The recovery after the pandemic was faster than expected,” she said. “But then Russia’s invasion of Ukraine began, and the global economy again experienced major uncertainty. Conditions improved in 2023 and 2024, although at a weaker level than before. At the beginning of 2025 everyone was ready for the global economy to recover, and then US President Donald Trump announced his tariff increases and it declined again. Growth projections for 2025 were limited to 0,5%, but later in the year conditions improved again.
“And then came 2026 – and now the war by the US and Israel against Iran. Each time the global economy begins to recover, something severely disrupts it.”
She said the latest disruption is having a serious impact on the prices of, among other things, oil, natural gas and fertiliser, with about a third of the world’s fertiliser moving through the Strait of Hormuz, which is currently affected by the conflict.
Davids said although it is uncertain how long the war may continue, the price of a barrel of oil is estimated at $82 by this time next year, which is significantly lower than the current price of $100 to $110.
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Direct Input Costs Could Rise by Up to R1 800/ha
Direct input costs could increase by between R1 600/ha and R1 800/ha for dryland crops if the war with Iran continues for a prolonged period, according to BFAP’s calculations. This could lead to a significant decline in profit margins.
Farmers, including winter grain producers, already needed to harvest more tonnes per hectare this year, even before the war broke out, to cover their costs. If the war continues, break-even yields will need to increase by a further 0,2 t/ha to 0,32 t/ha.
Furthermore, in a scenario where the war continues for a long time, depending on the crop, an additional 0,4 t/ha to 1,03 t/ha will need to be harvested to service a farmer’s overhead costs.
BFAP urged farmers to make decisions carefully, given the weather service’s forecasts that the winter rainfall region may again experience below-average rainfall until mid-winter this year.
Also read: High risk of above-average and below-normal rain in the coming months – weather service
