High corn price drives South African feed makers to wheat

Wheat is being used for animal feed in Western Cape Province, which produces about 40% of South Africa’s wheat, said an official at Meadow Feeds, who declined to be identified in line with company policy.

 

Meadow, owned by Pretoria, South Africa-based Astral Foods, supplies feed for farm animals ranging from chickens and ostriches to cattle.

 

While yellow corn is still being used, the difference between the cost of wheat produced in the province and corn shipped from provinces in eastern South Africa is making wheat an affordable alternative, he said in an interview with Bloomberg.

 

Corn prices in South Africa have surged after national stocks of the grain dropped 40% as of the end of November, the biggest fall in at least a decade, because of a surge in exports.

 

“This is happening for the first time in roughly 10 years,” he said. Historically, wheat used to be approximately 900 rand ($112) more expensive per ton than yellow corn, but the difference has narrowed, Brink van Wyk, a trader at Bosveld Graan, said in an interview in Johannesburg.

 

Yellow corn for March delivery closed trade at 2,570 rand a ton on the South African Futures Exchange in Johannesburg, and has increased 39% in the last six months while wheat for delivery in that month closed trade at 2,795 rand, a difference of 225 rand. Six months ago wheat was 940 rand more expensive than yellow corn.