South Africa’s agricultural sector delivered a resilient but uneven performance in 2025, supported by strong export growth, generally favourable weather conditions, and a rebound in agricultural gross domestic product (GDP). However, climate volatility, infrastructure constraints, and unresolved policy challenges continue to pose material risks as the sector prepares for 2026.
These insights were shared at Nedbank’s Agriculture presentation, held on 27 January 2026, where industry experts assessed the sector’s 2025 performance and discussed the outlook for the year ahead.
Supportive financing environment, but caution urged
Daneel Rossouw, Head of Agricultural Sales at Nedbank, said 2025 marked the start of a meaningful monetary easing cycle, offering some relief after an extended period of high interest rates. However, he cautioned that improved financing conditions should be approached with discipline.
Rossouw encouraged farmers to consolidate balance sheets, invest in productivity and climate resilience, diversify markets and revenue streams, and strengthen financial buffers against climate and geopolitical shocks.
Exports underpin sector recovery
Dr Tracy Davids, senior economist at the Bureau for Food and Agricultural Policy (BFAP), noted that while primary agriculture contributes about 3% to South Africa’s GDP, the broader agricultural value chain accounts for roughly 14%, underscoring the sector’s importance to the economy.
Agricultural trade remained a standout feature in 2025, with exports reaching US$13.3 billion. Horticulture continued to anchor export performance, led by citrus exports valued at approximately R38 billion, followed by grapes, raisins, and pome fruit. The European Union remained the largest destination for fruit and nut exports at 36%, while China, the Middle East, and the United Kingdom continued to grow in importance.
However, the year was not without challenges. Foot-and-mouth disease outbreaks weighed heavily on the beef sector, while infrastructure constraints — particularly equipment shortages and volatile performance at the Cape Town port late in the season — disrupted logistics. Input costs eased from recent highs but remained elevated, and uncertainty around US tariff policy added pressure to trade conditions.
Agricultural GDP turns the corner
After two consecutive years of decline, agricultural GDP rebounded strongly in 2025. BFAP estimates suggest full-year output will be broadly in line with 2023 levels. Between the first and third quarter, agricultural GDP grew by 19.5%, outperforming all other sectors of the economy.
Revenue growth is expected across all subsectors, led by field crops (+18.8%), livestock (+10.2%), and horticulture (+7.8%). Agro-processing, which absorbs about 62% of farm sales, also showed resilience, outperforming the wider manufacturing sector despite slightly slower growth than in 2024.
Climate volatility intensifies risks
Agricultural meteorologist Johan van den Berg highlighted growing climate variability as a key risk. Global temperatures are now more than 1.2 °C warmer than a century ago, with 2024 recorded as the hottest year on record and 2025 ranking third.
In South Africa, extreme weather events are becoming both more frequent and more difficult to predict. Frost is occurring up to four weeks later in some regions, while extreme heatwaves are appearing earlier in the season. Rapid shifts between frost and temperatures above 40 °C are placing crops under severe physiological stress, complicating planting decisions and yield forecasting.
Rainfall patterns are also shifting. Declining late-winter and spring rainfall in summer rainfall regions, combined with heavier midsummer precipitation, is increasing runoff and reducing effective soil moisture. These changes have already contributed to reduced dryland winter wheat production in the Free State and are forcing producers to reconsider cultivar selection, planting windows, and long-term investment decisions.
Van den Berg noted that forecasts indicate a transition to Enso-neutral conditions in early 2026, suggesting more moderate but uncertain rainfall. He cautioned that climate variability, rather than average temperature increases alone, will remain the dominant driver of seasonal outcomes.
Policy reform critical for 2026
Wandile Sihlobo, chief economist at Agbiz, said recent growth has been driven more by farmer efficiency and favourable weather than by policy reform. He identified land reform, export diversification, improved biosecurity, reform of the Southern African Customs Union, and decisive action against rural crime and stock theft as priorities for 2026.
While agriculture showed resilience in 2025, sustained growth into 2026 will depend on coordinated action across climate risk management, infrastructure investment, and policy implementation.