After being strong for much of last year, sentiment in South Africa's agribusiness sector has weakened significantly. The AgBiz/IDC Agribusiness Confidence Index (ACI) fell 18 points to 49 in 1Q2026, its lowest level since 3Q2024.
There are many types of pressures on this sector. The continued spread of foot-and-mouth disease is placing immense financial pressure on the livestock industry, while African swine fever remains a challenge for pig producers. At the same time, low global prices of commodities such as sugar and wheat are putting further pressure on producers.
Concerns about the impact of the Middle East conflict on energy and fertilizer prices are also contributing to a more cautious mood among agribusinesses.
The current ACI level of 49 is just below the 50-neutral mark, which suggests that South African agribusinesses are becoming somewhat pessimistic about business conditions in the country. The survey was conducted in the first week of March 2026 and covered agribusinesses operating in various agricultural sub-sectors across the country.
Figure 1: Agbiz/IDC Agribusiness Confidence Index
The AgBIZ/IDC Agribusiness Confidence Index reflects the perception of at least 25 agribusiness decision makers on the 10 most important aspects affecting a business in the agriculture sector (i.e. turnover, net operating income, market share, employment, capital investment, export volumes, economic growth, general farming conditions, debtor provisions for bad debts and financing costs).
It is used by agribusiness executives, policy makers and economists to understand perceptions of the agribusiness sector, and also serves as a leading indicator of the value of agricultural production, providing a basis for agribusinesses to support their business decisions.
Discussion of sub-indices
The ACI consists of 10 subindices, and the largest decline occurred in the first quarter of 2026. Here is a detailed view of the subindices.
• Turnover subindex confidence Q4 2025 fell 21 points to 50. This was driven primarily by considerations from winter crop growing areas, which reported relatively low yields at a time when global wheat prices are under pressure. w
There is also concern among beef and dairy industry respondents due to the ongoing foot-and-mouth disease outbreak. Similarly, the net operating income subindex fell 22 points to 43 in the first quarter of 2026. This is the lowest level since the end of 2024 and is also based on similar factors.
• The market share subindex fell 17 points to 54 in the first quarter of 2026. Most respondents across various subsectors shared this pessimism, and we suspect that the inefficiencies at the port in Cape Town have also added to the bearish mood.
• The employment subindex declined by 14 points to 39 points in the first quarter of 2026. This reflects the general sentiment of the region, although it is worth noting that the livestock industry is not the major employer in agriculture.
Most jobs are in the horticulture, wine and field crop industries. Still, the bearish environment may also reflect the broader mood in the region amid pressure from foot-and-mouth disease and Middle East issues.
• The capital investment subindex fell 20 points to 54 from Q4 2025. This big decline is again more about the general mood of the sector than overall activity. For example, farmers continue to invest in tractors and combine harvesters.
South Africa's tractor sales totaled 669 units in February 2026, up 5% year-on-year. Combine harvester sales stood at 19 units, up 63% from the previous month. These strong monthly sales follow the January 2026 rally.
• The sub-index measuring export volume fell 25 points to 50 by the fourth quarter of 2025. Rising shipping costs as well as concerns about the impact of the Middle East conflict on logistics may be the primary challenges here. Apart from these issues, production conditions in horticultural and field crops across South Africa look promising.
• The general economic conditions subindex remained quite resilient, falling only one point to 61 in the first quarter of 2026. This enduring sense of optimism is in line with the country's general macroeconomic sentiment following a number of positive developments arising from S&P's credit rating upgrade, South Africa's removal from the FATF gray list and the implementation of Operation Vulindlela.
• The general agricultural conditions subindex fell 31 points to 39 in the first quarter of 2026. This is the lowest level since the end of 2024. Adverse production conditions in the Western Cape during the winter crop season, excessive rainfall in the north-eastern parts of the country and animal diseases are the major issues impacting farming conditions.
change in interpretation
• The subindices of debtor provision for bad debts and financing costs are interpreted differently from the above indices. A decline is seen as a favorable development, while an increase indicates increasing financial stress.
• In Q1 2026, debtor provision for bad debt indices weakened 8 points to 39, reflecting final gains from generally larger agricultural output in the 2024-25 season, mainly in field crops and horticulture. These improved financial conditions continue to support agricultural machinery sales. The financing cost index fell 21 points to 62. This was partly due to the recent decline in interest rates.
ACI results for Q1 2026 show that all is not well in South African agriculture. The livestock and pig industries are under extreme financial pressure due to diseases, and these results reflect the current challenge.
What remains important is a rapid vaccination process that will move the region away from the current worrying path. The Middle East conflict also presents new challenges, complicating exports to the region and putting upward pressure on fuel and fertilizer prices.
As the country approaches the 2026-27 winter crop season and subsequent 2026-27 summer crop season, these factors could put pressure on the sector.
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