South African Agriculture Faces Tougher Years Ahead as Farmers Turn to Productivity and Export Growth

South Africa’s agricultural sector is entering a period of consolidation as lower commodity prices, rising production costs and weak consumer demand create a more challenging operating environment for farmers. The outlook was highlighted at the launch of the 2026 Bureau for Food and Agricultural Policy (BFAP) agricultural baseline outlook in Pretoria, which examines the expected direction of agriculture over the next decade while also considering longer-term trends towards 2050. Despite the pressures facing producers, the outlook identifies opportunities through stronger export markets, improved productivity and the development of higher-value agricultural products. Agriculture has shown resilience despite repeated economic and environmental shocks, growing at an average rate three times faster than the overall economy between 2011 and 2025. The next phase of growth, however, is expected to require farmers, government and industry to focus more strongly on efficiency, market access, technology and long-term competitiveness.

Delivering the keynote address at the BFAP outlook launch, Agriculture Minister Willie Aucamp said South African farmers already possess the expertise needed to drive the sector forward. He argued that the government’s primary responsibility should be to create an environment that allows producers to farm efficiently rather than placing additional administrative burdens on them. Aucamp praised local farmers for their production capabilities and said government should focus on removing obstacles that prevent agricultural businesses from reaching their full potential. He called for regulations and processes that make it easier for farmers to operate, invest and expand. His comments place a strong emphasis on cooperation between government and industry as the agricultural sector responds to changing market conditions and increasing production pressures.

Aucamp also called for greater collaboration between government and agricultural stakeholders, particularly where disagreements exist over how challenges should be addressed. The sector faces a wide range of issues, including animal disease, infrastructure constraints, market access and the need to expand exports. These challenges cannot be addressed effectively by farmers or government working separately. Industry organisations have technical knowledge and direct experience of production conditions, while government has an important role in policy, regulation, infrastructure and international trade relationships. Greater cooperation could help ensure that decisions affecting farmers are informed by practical conditions on farms and that solutions are focused on improving productivity and competitiveness.

BFAP’s outlook provides a detailed assessment of where South African agriculture could be heading as the sector moves through a period of changing economic and production conditions. BFAP director and manager of commodity markets and foresight, Dr Tracy Davids, said the outlook needs to be considered against a volatile global environment. Geopolitical tensions, climate events, animal disease, changing trade conditions and rising compliance costs are creating uncertainty for producers and agricultural businesses. Davids said the sector needs to look beyond short-term market disruptions and consider its fundamental direction over the longer term. This includes asking how agriculture can influence its own future and maximise opportunities for sustainable growth.

Field crop producers are likely to experience some of the greatest short-term pressure as the sector adjusts after a strong production and commodity price cycle. Commodity prices have declined significantly while input costs remain high, putting pressure on farm margins. BFAP expects some of the expansion in cultivated area achieved during the recent period of strong prices to reverse as producers adjust to lower returns. Nearly 700,000 hectares were added during the expansion cycle, but BFAP expects only about half of this area to be lost. This suggests that producers are likely to retain some of the productive capacity built during the stronger price period, particularly where improvements in yields and efficiency allow farmers to remain profitable.

Productivity improvements are becoming increasingly important for field crop farmers as opportunities to expand cultivated land become more limited. Yield gains in maize, soybeans, sunflower and canola have helped producers remain viable despite lower commodity prices. These improvements have been supported by conservation agriculture, irrigation, precision farming technologies, machinery investment and improved seed varieties. Farmers who can increase output from existing land may be better positioned to manage periods of lower prices and rising input costs. BFAP expects future growth in major field crops to depend increasingly on productivity because cultivated area is expected to remain relatively flat while commodity prices are projected to grow more slowly than inflation.

The shift towards net exports in most major field crops also creates opportunities for producers and the wider agricultural economy. Stronger export performance can provide farmers with access to larger markets and reduce reliance on domestic demand. However, competing internationally requires producers to maintain high levels of efficiency while meeting quality, safety and market requirements. Infrastructure and logistics will remain important because agricultural products need to reach international markets at competitive costs. Improving export capacity could therefore become an increasingly important part of South Africa’s agricultural growth strategy as domestic consumer demand remains constrained.

The sugar industry continues to face pressure, with planted area declining substantially over the past decade. BFAP expects sugar production areas to stabilise at lower levels rather than returning quickly to previous levels. Producers face challenges related to profitability, production costs and changing market conditions, making alternative sources of demand increasingly important. Bioenergy could provide one potential avenue for creating additional demand for agricultural products while supporting greater diversification within the sector. The development of alternative markets could help sugar producers improve the long-term sustainability of their operations while reducing dependence on traditional demand streams.

The livestock outlook is more positive, particularly as lower feed costs improve profitability for producers. International meat prices have also strengthened, with the FAO meat price index reported to be 18% higher than five years ago and 4% above the previous year. These conditions could support stronger returns for livestock farmers if production costs remain manageable. BFAP expects meat production to grow by approximately 1.5% to 2% annually over the outlook period. Faster growth could be possible if South Africa reduces animal disease risks and improves access to premium international markets.

Animal disease remains one of the biggest barriers to South Africa’s livestock export ambitions. Disease outbreaks can restrict movement, disrupt production and prevent farmers from accessing important international markets. Stronger animal health systems, improved surveillance and faster responses to outbreaks are therefore critical for the future of the livestock sector. If disease risks can be reduced, South African producers could take greater advantage of international demand for quality meat products. This would benefit farmers while also strengthening the country’s agricultural export earnings and supporting businesses throughout the livestock value chain.

Poultry remains South Africa’s largest meat sector and continues to face the challenge of being a net importer. Domestic producers have made progress in reducing imports of mechanically deboned meat, demonstrating that local production can become more competitive under the right conditions. BFAP’s outlook suggests that the next stage for the poultry industry should involve moving beyond import replacement towards developing stronger export opportunities. Achieving this transition will require producers to maintain competitive production costs while meeting the quality and regulatory requirements of international buyers. Greater export participation could provide additional growth opportunities for poultry businesses and contribute to a more competitive domestic industry.

The beef industry is also undergoing changes as producers and exporters increasingly focus on premium products. Higher-value cuts are accounting for a growing share of beef exports, reflecting opportunities to earn greater returns from quality-focused markets. Premiumisation can allow producers to target consumers who are willing to pay more for particular qualities, cuts or production standards. However, accessing these markets requires consistency in animal health, traceability, processing and product quality. Developing stronger premium beef markets could provide an important source of growth for South African livestock producers while helping the industry increase the value generated from exports.

Horticulture remains one of the strongest growth areas in the agricultural outlook, with production expected to increase by just over 20% and exports by approximately 24% over the next decade. Growth is expected to come mainly from improved yields, maturing orchards and the adoption of better varieties. Farmers will also need to meet strict international quality requirements to maintain and expand access to export markets. Water availability and rising input costs remain significant constraints that could affect production growth. Port delays also pose a serious risk because fresh fruit depends on efficient logistics to reach international consumers while maintaining quality.

The importance of exports becomes even clearer when considering weak domestic consumer demand. South African households are under pressure from economic conditions, which can limit the growth of domestic food consumption and reduce the ability of producers to rely solely on local markets. Export markets can provide an alternative source of demand and create opportunities for farmers to expand production. However, export growth depends on reliable infrastructure, competitive logistics, favourable trade relationships and compliance with international standards. Continued efforts to diversify export destinations could therefore help protect the agricultural sector from fluctuations in domestic demand.

The BFAP outlook also highlights the importance of ensuring that the sector’s transformation story includes farmers who are often overlooked in official agricultural statistics. BFAP analyst Khani Baloyi pointed out that more than 100,000 households produce agricultural goods for sale, while around two million households produce primarily for subsistence. Much of this activity remains unmeasured or underreported, which means the contribution of these producers is not always fully reflected in assessments of the agricultural economy. Better data could help policymakers understand the scale of smallholder and household agriculture and design more appropriate support programmes. Bringing these farmers into the broader transformation narrative could also help create stronger pathways into commercial agriculture and formal markets.

South Africa’s agricultural sector therefore faces a mixed outlook over the coming decade, with pressure in some areas balanced by significant opportunities in others. Field crop farmers will need to focus on productivity as commodity prices moderate and cultivated area expansion slows. Livestock producers could benefit from stronger meat prices and lower feed costs, but animal disease remains a major obstacle to export growth. Horticulture is expected to remain a major source of expansion, particularly through higher yields, improved varieties and growing exports, although water, logistics and input costs will continue to require attention. Across all agricultural subsectors, stronger market access, improved infrastructure, innovation and collaboration between government and industry will be essential.

The 2026 BFAP agricultural baseline outlook makes it clear that South African agriculture is not entering a period without opportunity, but the nature of growth is changing. Farmers are likely to face tighter margins and greater uncertainty, making productivity, efficiency and careful cost management increasingly important. Export markets and higher-value products offer opportunities for businesses that can meet international standards and manage the risks associated with global trade. At the same time, government must create an enabling environment by reducing unnecessary barriers, strengthening infrastructure, supporting animal health and improving market access. If these priorities are addressed through stronger cooperation between farmers, industry and government, South Africa’s agricultural sector can build on its resilience and continue contributing to food security, employment, exports and economic growth well into the future.