By Wandile Sihlobo, Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz)
Last week, we received South Africa’s first-quarter GDP data. One sector that some may be observing is the performance of agriculture, which was a significant drag on the economy last year.
The mid-summer drought, delays in harvesting deliveries and animal diseases were some of the challenges we encountered in 2024.
However, this year, the conversation should shift somewhat and become more upbeat. I won’t provide the figures on how we anticipate the sector will perform.
Still, I would like to highlight some key points worth considering ahead of the data release and throughout the year, particularly in light of the agricultural performance.
The narrative for the sector, amongst other things, will be guided by the following encouraging points relative to 2024.
- We have an excellent summer grains and oilseeds season, with the latest production forecasts by the Crop Estimates Committee suggesting a harvest of 17.98 million tonnes, up by 16% from the 2023-24 drought season. Favourable rains and decent area plantings support this.
- South African sugar production for the 2024-25 production season is forecast to recover by 7% year-on-year to 2.09 million tonnes. This is also due to favourable weather conditions and the availability of sufficient water for irrigation.
- We have also received encouraging production data from SA Wine and Vinpro, forecasting South Africa’s wine grape harvest at 1.244 million tonnes, an 11% recovery from the exceptionally poor harvest of 2024.
- The South African Table Grape Industry has also posted some upbeat production figures, indicating that the 2024-25 total harvest inspected is 78.9 million cartons, 4% higher year-on-year.
- We also see encouraging production data from citrus, various fruits, and vegetables.
- In poultry production, the moderating prices of maize and soybeans should help the industry in its ongoing recovery.
The one area that remains a concern is the livestock industry, primarily due to the recent outbreak of foot-and-mouth disease. We have already seen various trading partners temporarily banning South Africa’s beef exports due to the foot-and-mouth disease outbreak.
Given the sizable share contribution of the livestock industry to South Africa’s agricultural gross value added, its challenges are something worth reflecting on when considering South African agricultural performance.
It is because of the livestock industry challenges that you have seen me write about the possible “uneven” recovery of agriculture in 2025.
Now, the quarterly agricultural gross value-added figures tend to be quite noisy. However, if one considers the annual performance, it will be reasonable to believe that agriculture will recover from the 2024 contraction (-8% y/y in 2024, and -4.8% in 2023).
The base effects, combined with encouraging production in field crops, horticulture, and poultry, are enough to support the annual recovery of the sector.
Still, from a subsector perspective, we will likely see an uneven performance, with challenges more in the livestock industry.
