The current conditions in the summer grain regions are having a significant economic impact on grain producers, with the summer grain production regions experiencing major challenges with drought conditions.

The extreme heat and dry conditions caused the harvest to deteriorate much faster than initially expected, says industry organisation Grain South Africa (Grain SA).

"We have seen large areas where the damage is already irreversible," comments Grain SA CEO Tobias Doyer.

"Irrigated maize is also experiencing challenges owing to loadshedding and the heat conditions."

Additionally, the winter grain production season faced several challenges with excessive rain in certain areas resulting in losses in yields and placing financial pressure on producers in affected areas, he says.

These challenges are experienced at a time when margins on crops such as maize are already low owing to international supplies and international price pressure.

"This makes the recovery period of individual producers very difficult in challenging production conditions. Grain SA is very concerned about the impact of the drought and market conditions on grain producers.

"International competitors benefit from subsidised, affordable comprehensive insurance that provides them with a competitive advantage. Similar local systems could have substantially supported South African producers given the challenging production conditions," Doyer says.

Grain SA continuously monitors the production conditions and publishes a qualitative production overview.

"The National Crop Estimate Committee's first estimate, which will be published at the end of February, will be important to evaluate the national situation. However, the reality is that there are currently several individual producers who are facing significant losses owing to the drought and markets," said Grain SA chairperson Derek Mathews, who is also a producer in one of the areas experiencing significant challenges.

Grain SA will engage with the necessary role players to raise these challenges, and further suggests that producers who have already experienced significant challenges contact their input financiers at an early stage to ensure that necessary changes can be made in time, the organisation states.