Despite the overall downturn in agriculture for 2024, which saw an 8% year-on-year decline due to severe weather conditions, the sector demonstrated its resilience.
According to FNB senior agricultural economist, Paul Makube, the national sector’s performance in the fourth quarter represented a significant recovery, with a 17.2% growth quarter-on-quarter (seasonally adjusted). This came after two consecutive quarters of declines, including a sharp 19.7% drop in the third quarter.
Makube explained that the contraction of summer crops, particularly maize, had been a major contributing factor to the overall agricultural downturn.
Maize production fell by 22% year-on-year, with total summer crop output declining by 9.1%. Despite these setbacks, Makube pointed to the stronger-than-expected performance in the fourth quarter as a sign of the sector’s resilience.
“The sector has shown its ability to recover even after severe setbacks, including the impact of extreme weather events,” he said.
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Makube also highlighted the increase in agriculture exports, which rose by 3% to reach $13.7 billion in 2024, driven by higher demand and better prices.
He noted that the Agribusiness Confidence Index (ACI), which is a leading indicator of agricultural performance, had already signalled a positive turnaround. The ACI rose by 10 points in the fourth quarter, reaching 58 points, which was well above the breakeven level of 50 points.
Looking ahead to 2025, Makube was optimistic about the recovery of the agricultural sector, particularly with the return of La Niña weather patterns. He forecasted that summer crop production would increase by 10.9%, reaching 17.23 million tonnes.
Better outlook for 2025
“We expect better yields in 2025, which should lead to a recovery in grain production and a stabilisation of food inflation,” Makube explained. This improved production outlook is expected to lower feed costs for livestock farmers, contributing to better margins in the livestock sector.
Makube also noted that the higher yields and reduced feed costs would be a positive development for consumers, as food prices are likely to stabilise into the second half of 2025. “This is good news for the country, especially with food inflation pressures dissipating,” he said.
Overall, despite the challenges faced in 2024, both the Western Cape and South Africa’s agricultural sectors are set to experience a recovery in 2025, driven by improved weather conditions, stronger export demand, and enhanced business confidence.
With continued government support and strategic planning, the agricultural sector remains poised to be a key contributor to economic growth and job creation.
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