The data released by Statistics South Africa showed that agricultural gross value added expanded by 15,8% quarter-on-quarter (seasonally adjusted) in the first quarter of 2025.
It is rather challenging, and seems a bit strange, to write about positive data on South Africa’s agricultural sector when the largest subsector of the farming economy is reeling from a severe animal health crisis.
The speed at which the outbreak of foot-and-mouth disease can be contained, and the industry’s revival, along with associated costs to the cattle farming business, is something we will understand better in the coming months.
What is encouraging for now is that the leadership of the department of agriculture, as well as organised agriculture and others, is focused on the issue. Hopefully, a long-lasting solution or improvement will emerge from this crisis, leading to increased attention.
The data point that caught people’s attention this past week was the recovery of South Africa’s farming economy in the first quarter and its contribution to the overall economy. The data released by Statistics South Africa showed that agricultural gross value added expanded by 15,8% quarter-on-quarter (seasonally adjusted) in the first quarter of 2025.
Now, I am always reluctant to focus too much on the agricultural gross value-added quarterly figures due to their noise and the potential delays in some harvest data, which often opens the door to later revisions. It is usually better to put more emphasis on the annual performance of the sector.
Without getting into data discussions (and what could be revised), what is clear this time around is that the expansion in the first quarter is primarily due to the improved performance of the horticulture subsector.
It is also fair to say that South Africa’s agricultural sector is in a state of recovery after the drought in 2024. However, the recovery is uneven, as the livestock subsector is facing challenges related to animal diseases that will become apparent later in the year.
Notably, the improved production performance of field crops and other fruit, as well as wine, among other value chains, will support the sector further in the coming quarters. The harvest in these value chains started only in the second quarter of the year. The production data at the farm level remains encouraging. For example;
- 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 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 other fruits and vegetables.
- In poultry production, the moderating prices of maize and soybeans should help the industry in its ongoing recovery.
On the downside, 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 African beef exports due to the 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 agricultural performance. It is due to the challenges in the livestock industry that we have consistently discussed the potential “uneven” recovery of agriculture in 2025.
Still, it is reasonable to believe that agriculture will register positive growth in 2025, following the recent contraction of (-8.7% y/y in 2024 and -4.6% 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.
Overall, the South African economy grew by 0,1% quarter-on-quarter (seasonally adjusted) in the first quarter of 2025. The country remains in a low-growth trap.
Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa.