The upcoming planting season could present financial pressure for consumers as higher fertiliser and diesel costs add to the risk of a drier El Niño-driven season.
Consumers are facing a double-edged sword from both ends of the value chain amid increased inflation, which makes food more expensive to produce, while also putting pressure on consumers.
Inflation is impacted by the surge in global oil prices due to the Middle East conflict, and while farmers try to manage the challenge, they remain faced with the high cost and risk of producing the next crop due to the upcoming El Niño.
READ: UN official urges more funding as El Niño threat looms over Horn of Africa
Farmers face challenge to balance cost and profitability
Jolanda Andrag, AgriSA CEO, said farmers are currently pushed into the corner to decide how much money they need to commit to the new production season, while also facing the possibility of hotter and drier conditions that could affect yields.
She said farmers are reviewing their planting decisions, although it may be early to quantify a national shift. The formal 2026/27 intentions-to-plant estimates are due on October 27.
“What is clear is that farmers are weighing crop choice, expected prices, rainfall risk and the amount of working capital they are prepared to put at risk.
“The pressure to reduce expenditure is real, but indiscriminate fertiliser cuts can lower yields and worsen profitability. Producers are more likely to focus on optimising inputs through soil testing, realistic yields targets, precision application and changes in crop mix,” said Andrag.
Andrag said there was no single percentage of additional costs that farmers could absorb because this varied between farms, regions and production systems.
Grain SA budgets show that margins are already under pressure, with variable production costs in some eastern maize regions exceeding R20 000 a hectare.
Fertiliser remains a challenge
She said fertiliser remained one of the biggest pressures facing farmers. StatsSA reported that between March and April 2026, ammonia nitrate fertiliser prices increased by 37.6% while other fertilisers increased 20.1%.
Andrag said fertilisers have indicative prices of about R17 500 a tonne for urea, R19 100 for LAN and R22 700 for MAP. Grain SA’s latest budgets show fertiliser costs exceeding R8 600 a hectare for maize in parts of the Eastern Free State and R10 000 a hectare in the eastern Highveld.
Andrag emphasised that some farming systems see fertiliser accounting for more than 40% of variable production costs.
She said diesel has added pressure considering that it is required for planting, harvesting, irrigation, transportation and moving agricultural inputs and grain through the supply chain.
‘Challenges don’t mean business should stop’
READ: Lesotho prepares for worsening heat and drought linked to El Niño
Abrie Rautenbach, Absa CIB managing executive for agriculture, said the challenges faced in agriculture create a financial squeeze for households, as a poor agricultural season does not mean that businesses would be stepping away.
“The first task is to understand whether the strain belongs to the business or to the wider industry, because an agriculture client caught in a difficult cycle needs to be managed very differently from one whose problems originate within the operation,” said Rautenbach.
He said when farmers face higher costs and weaker yields, some of that pressure can be absorbed through lower margins, efficiency gains or other parts of the value chain. However, where higher production costs ultimately feed into commodity prices and food prices, consumers could be left paying more for the same basket of goods.
He also warned that the expected intensification of El Niño through the second half of 2026 could affect agricultural markets differently, with some areas facing drought and others excessive rainfall and flooding.
“Either way, this is a moment for agricultural businesses to speak to their banks about whether their current financial position gives them enough room to carry the next season, and what support may be available if it does not,” said Rautenbach.
- The upcoming planting season may cause financial pressure for consumers due to higher fertiliser and diesel costs combined with the risk of a drier El Niño-driven season.
- Fertiliser prices increased significantly, with ammonia nitrate up 37.6% and other fertilisers up 20.1% between March and April 2026, while urea, LAN, and MAP fertilisers are priced around R17,500 to R22,700 per tonne.
- Farmers are reconsidering planting decisions, weighing crop choices, expected prices, rainfall risks, and working capital, with some focusing on optimising inputs through soil testing and precision application.
- Diesel costs add pressure as they are essential for planting, harvesting, irrigation, transporting inputs, and moving grain through the supply chain.
- Agricultural challenges create a financial squeeze on households, potentially leading to higher food prices if increased production costs are passed on to consumers.
The upcoming planting season could present financial pressure for consumers as higher fertiliser and diesel costs add to the risk of a drier El Niño-driven season.
Consumers are facing a double-edged sword from both ends of the value chain amid increased inflation, which makes food more expensive to produce, while also putting pressure on consumers.
Inflation is impacted by the surge in global oil prices due to the Middle East conflict, and while farmers try to manage the challenge, they remain faced with the high cost and risk of producing the next crop due to the upcoming El Niño.
READ: UN official urges more funding as El Niño threat looms over Horn of Africa
Jolanda Andrag, AgriSA CEO, said farmers are currently pushed into the corner to decide how much money they need to commit to the new production season, while also facing the possibility of hotter and drier conditions that could affect yields.
She said farmers are reviewing their planting decisions, although it may be early to quantify a national shift. The formal 2026/27 intentions-to-plant estimates are due on October 27.
“What is clear is that farmers are weighing crop choice, expected prices, rainfall risk and the amount of working capital they are prepared to put at risk.
“The pressure to reduce expenditure is real, but indiscriminate fertiliser cuts can lower yields and worsen profitability. Producers are more likely to focus on optimising inputs through soil testing, realistic yields targets, precision application and changes in crop mix,” said Andrag.
Andrag said there was no single percentage of additional costs that farmers could absorb because this varied between farms, regions and production systems.
Grain SA budgets show that margins are already under pressure, with variable production costs in some eastern maize regions exceeding R20 000 a hectare.
She said fertiliser remained one of the biggest pressures facing farmers. StatsSA reported that between March and April 2026, ammonia nitrate fertiliser prices increased by 37.6% while other fertilisers increased 20.1%.
Andrag said fertilisers have indicative prices of about R17 500 a tonne for urea, R19 100 for LAN and R22 700 for MAP. Grain SA's latest budgets show fertiliser costs exceeding R8 600 a hectare for maize in parts of the Eastern Free State and R10 000 a hectare in the eastern Highveld.
Andrag emphasised that some farming systems see fertiliser accounting for more than 40% of variable production costs.
She said diesel has added pressure considering that it is required for planting, harvesting, irrigation, transportation and moving agricultural inputs and grain through the supply chain.
READ: Lesotho prepares for worsening heat and drought linked to El Niño
Abrie Rautenbach, Absa CIB managing executive for agriculture, said the challenges faced in agriculture create a financial squeeze for households, as a poor agricultural season does not mean that businesses would be stepping away.
“The first task is to understand whether the strain belongs to the business or to the wider industry, because an agriculture client caught in a difficult cycle needs to be managed very differently from one whose problems originate within the operation,” said Rautenbach.
He said when farmers face higher costs and weaker yields, some of that pressure can be absorbed through lower margins, efficiency gains or other parts of the value chain. However, where higher production costs ultimately feed into commodity prices and food prices, consumers could be left paying more for the same basket of goods.
He also warned that the expected intensification of El Niño through the second half of 2026 could affect agricultural markets differently, with some areas facing drought and others excessive rainfall and flooding.
“Either way, this is a moment for agricultural businesses to speak to their banks about whether their current financial position gives them enough room to carry the next season, and what support may be available if it does not,” said Rautenbach.
