Maize pricing models questioned

Mr Jan van Zyl, FNB head of agric information and marketing, raised concerns about maize pricing models stating: “As this season’s harvesting draws to a close, it is becoming increasingly evident that the majority of maize farmers will not be seeing the financial benefits. This is because they have injudiciously neglected to appropriately price their crops through options and contracts available to them.” South Africa on Tuesday raised its forecast for maize output for 2014 to 14.017 million tonnes from a prior estimate of 13,89 million tonnes as deliveries to silos showed a bigger crop of the yellow maize variety than previously expected. The maize crop will consist of an estimated 7,697 million tonnes of white maize and 6,32 million tonnes of yellow, which is the largest in 30 years, the government’s crop estimates committee (CEC) said. Mr Van Zyl further said, “Farmers who neglected to exercise their pricing options prior to February were in other words forced to accept the July price – or store their maize in the hope that prices will improve. Revenue wise, they have forfeited a minimum of 23% of their gross income and most probably will not be recovering their production costs.” To read more click HERE. For the report of the Crop Estimates Committee click HERE.