South Africa is producing significantly less wheat today than it did two or three decades ago, even as global wheat production continues to climb to record levels year after year. In the 2024/25 marketing season South Africa harvested only about 1.9–2.1 million tonnes of wheat (one of the lowest totals in recent memory), while global output is forecast to exceed 800 million tonnes in 2025/26 according to the latest USDA and FAO estimates.The stark contrast is painful for local wheat farmers: they face structural, economic and policy headwinds that make wheat one of the most difficult crops to produce profitably in South Africa right now.
The area planted to wheat has shrunk dramatically — from over 1 million hectares in the 1990s to roughly 450 000–550 000 ha in recent seasons — and yields, while occasionally strong, cannot offset the loss of planted area. Farmers are not failing; the system around them is failing them.The main problems driving down production are structural, economic and policy-related:Low and uncompetitive producer prices are the biggest killer. International wheat prices have been soft for years, often trading below export parity once South African transport and port costs are added. At the same time, large volumes of cheap imported wheat — mainly from Russia, Ukraine and other Black Sea origins — arrive just before or during the local harvest (September–November), flooding the market and immediately pushing domestic prices down.
Farmers regularly receive prices below their full production cost.Import tariffs arrive too late and are often too low to help. The variable import tariff (under the Price Band System) is meant to protect local producers when world prices are low, but announcements are frequently delayed by months and the rate is usually too small to make a real difference. This allows cheap imports to depress prices exactly when local wheat is coming in.
Location differentials severely penalise Western Cape producers — the heart of South African wheat production. The Safex physical market applies large negative differentials (often R400–R600 per ton or more) to wheat delivered in the Western Cape. This effectively makes it almost impossible for Western Cape farmers to compete with wheat landed at Durban or Richards Bay. The system is widely criticised as unfair and biased toward coastal importers and millers .New, better-adapted wheat cultivars take far too long to reach farmers. Release and commercialisation can take 8–12 years or more in South Africa, leaving growers stuck with older varieties that have lower yield potential, poorer disease resistance and reduced water-use efficiency compared with what farmers in Australia, Argentina or Eastern Europe are planting.Rising input costs far outpace wheat prices.
Fertiliser, fuel, electricity, chemicals, labour and machinery expenses have risen sharply — often well above inflation — while wheat prices have stayed flat or fallen. The diesel rebate provides some relief, but many farmers say it no longer covers the real cost increases. The result is negative or razor-thin margins, forcing many to cut wheat hectarage or abandon the crop altogether.Land and water constraints add further pressure. Prime wheat land in the Western Cape faces competition from urban expansion, higher-value crops (wine grapes, fruit, canola), water-licensing uncertainty, and the slow pace of land reform that keeps productive land out of full commercial use.
Drought cycles and unreliable irrigation further limit yields.Lack of scale and infrastructure bottlenecks compound the problem. Many South African wheat farmers operate at relatively small scale compared with competitors in Australia, Canada, Russia or Ukraine. High fixed costs, poor rural roads, unreliable electricity and long lead times for equipment and spares make it even harder to stay competitive.Globally, wheat production keeps rising because major exporters benefit from massive subsidies (Russia, Ukraine, EU, US, India, Argentina), larger-scale farms with lower unit costs, faster adoption of improved genetics and precision farming, better access to affordable finance and crop insurance, and more predictable policy environments with timely protection against low-priced imports.
South African wheat farmers face the opposite: minimal or no subsidies, high input costs, delayed or inadequate import protection, slow cultivar improvement, and a location-differential system that disadvantages the main production region. Until these structural barriers are fixed — fair and timely import tariffs, reform of the location differential, faster cultivar release, better rural infrastructure, and a policy environment that does not penalise domestic producers while subsidised imports flood the market — local wheat production will continue to struggle, even as the rest of the world harvests record crops. Farmers are not failing; the system is failing them.
Wheat makes up roughly 60–70% of the cost of producing white bread flour. When wheat prices rise (or local supply tightens), millers increase flour prices. Retailers then pass those increases on to consumers. Bread is particularly sensitive because it is a staple food with relatively fixed margins at each step of the chain. Historical data shows bread prices often keep climbing even after wheat prices soften. For example, from 2022 onward, wheat prices fell significantly, but bread prices continued to rise steadily due to other cost pressures (electricity, labour, packaging, transport, fuel). A tighter local wheat supply adds another upward push that is hard to reverse.
The result is that South African consumers will pay more for bread and flour — even in years when global wheat prices are relatively low — because local production shortfalls force the country to compete on the world market under unfavourable conditions. The situation is unlikely to improve significantly until structural issues (tariffs, differentials, cultivar release, input costs) are addressed.
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