"One of the many contributing factors to the rise of the demand is the increase in the population. Maize and maize products are staples in households across the world and as families grow the demand for maize does the same. Maize is also a significant animal feed and as consumption of animal products increases, so too does the demand for maize. Currently, maize prices are climbing so quickly that many farmers have decided not to plant wheat this winter and have opted instead to plant maize for the current season," says Frank Winder, managing director of Advanced Nutrients, a supplier of soil fertility products and advice.
The maize price shows an interesting relationship with the global population growth, which indicates how important a food commodity maize is, whether it be for human or livestock feed. The global population reached the seven billion people mark at the beginning of 2012 which is an increase of 14.38% from 2001.
Between 2001 and 2012 the maize price exhibited a total price movement of 197.54% in relation to the 14.38% movement in the global population. However, on an annual compounding scale the maize price has risen steadily at 12.77% per year in relation to the global populations declining annual average increase of just above 1%. The increased demand in the face of declining growth projects much higher maize prices based upon on a global 'per head' basis.
The cost of 2.5kg of maize in 2002 was R5.93 and currently sits at R17.49, indicating a total increase of 195%. Projecting these same figures to around 2025 when the population will be reaching eight billion could mean a price of well over R60.00 per bag, compared to the inflationary calculated price of R36.00. That's almost equivalent to just under R40.00 a bag in today's prices.
"Another human factor that affects farming is change, which is necessary if one needs to make a paradigm shift. Many farmers are set in their ways and what has worked for them over the years they are reluctant to change. Unfortunately what worked for farmers ten years ago may not have the same results now. Everything is changing and farming styles need to change and farmers need to adjust to better and more effective ways of farming," says Winder.
"Avenues that farmers need to explore include practices that improve soil fertility, focusing on fertilizer efficiency, improving tilth and soil water holding capacity. Farmers should be given the opportunity to attend programmes that create awareness on how agricultural practices can affect their bottom-line and also guarantee food security," he concludes.
