By Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa
The South African poultry industry typically dominates headlines for various matters such as food security, tariffs, and disease outbreaks. However, they may face a slightly better operating environment in the coming months than in the past.
We are emerging from higher feed costs and the spreading avian influenza, amongst other issues. This period was an additional financial strain on poultry farming businesses.
But I think we are now in an environment where feed prices may continue to moderate, guided by the decline in yellow maize and soybean prices. The contract months’ prices of soybeans for the coming months already point to the moderating environment, trading around R4 000 per tonne on 19 March, which is down roughly 4% year-on-year. This is true for the July 2025, September, and December contract month prices.
We see an even more significant price moderation in soybeans. The spot price, July 2025, and September contract months prices are down 20% from a year ago and traded around R7 100 per tonne on March 19.
The improved production underpins the softening trend of these commodity prices. Yellow maize is up 2% from the 2023-24 production season, estimated at 6.91 million tonnes. We had a soybean harvest of 2.3 million tonnes in the 2024-25 production season, up 26% year over year.
Indeed, the base effects after a drought year add to this improvement, along with decent area plantings and better yields. Admittedly, there remains uncertainty about the quality of the harvest, especially the soybeans, because of the excessive rains late in April. We will know more about the quality of the crop in the coming weeks as the harvest progresses.
On 9 May, the first ten weeks of the new marketing year, the South African farmers delivered just under half of the expected soybean harvest, about 977 797 tonnes out of the anticipated harvest of 2,4 million tonnes. While this looks decent, it is 16% below the volume farmers had delivered this period last year.
The slow harvest illustrates that the season was late, and the prolonged rains may present quality issues. Be that as it may, the view remains that the volume is up, which is conducive for the soybean users.
What is comforting is the ample global soybean supplies, which may add downward price pressures on the international front. While South Africa is now a net exporter of soybeans, the global dynamics still matter a lot for the price direction. The same applies to yellow maize.
In its latest update, the International Grains Council forecasts the 2025-26 global maize production at 1,3 billion tonnes, up 8% year-on-year. The uptick is expected to be in all major maize-producing regions worldwide. The 2025-26 global soybean crop is estimated at 428 million tonnes, up 3% from the previous season.
Indeed, this season starts in the northern hemisphere and will only start later in the year in the southern hemisphere. Still, after decent supplies in the 2024-25 season in the northern hemisphere, the signalling of an even better harvest is conducive for softening prices for soybean and maize users.
Another important dynamic for the local poultry industry is its resilience in managing the recent avian influenza outbreak. Still, one can never boldly say they are out of the woods, as we continue to see cases of avian influenza in the US, UK and Brazil.
This means South Africa must remain vigilant and form an agile system of vaccine registration when required to assist the industry. The disease can devastate industry and food inflation; hence, vigilance and surveillance are paramount.
Considering all these risks, I remain optimistic that this year promises to be a much better operating environment for the poultry industry than the difficulties they recently faced.
