SA agribusiness confidence falls sharply on disease and market concerns
Several pressures are weighing on the sector. The continued spread of foot-and-mouth disease is placing immense financial strain on the cattle industry, while African swine fever remains a challenge for pig producers. At the same time, lower global prices for commodities such as sugar and wheat are adding further pressure on producers.
Concerns about the impact of the Middle East conflict on energy and fertiliser prices are also contributing to the more cautious mood among agribusinesses.
The current ACI level of 49 is just under the 50-neutral mark, suggesting that South African agribusinesses are becoming somewhat pessimistic about business conditions in the country. This survey was conducted in the first week of March 2026 and covered agribusinesses operating across various agricultural subsectors nationwide.
Figure 1: Agbiz/IDC Agribusiness Confidence Index
The Agbiz/IDC Agribusiness Confidence Index reflects the perceptions of at least 25 agribusiness decision-makers on the 10 most important aspects influencing a business in the agricultural sector (i.e. turnover, net operating income, market share, employment, capital investment, export volumes, economic growth, general agricultural conditions, debtor provision for bad debt and financing cost).
It is used by agribusiness executives, policymakers and economists to understand the perceptions of the agribusiness sector, and also serves as a leading indicator of the value of the agricultural output while providing a basis for agribusinesses to support their business decisions.
Discussion of the subindices
The ACI comprises 10 subindices, and most declined in Q1 2026. Here is the detailed view of the subindices.
• The turnover subindex confidence fell by 21 points from Q4 2025 to 50. This was primarily driven by views from winter crop-growing regions, which recorded relatively poor yields at a time when global wheat prices are under pressure. W
e also have concerns in the beef and dairy industry respondents due to the ongoing foot-and-mouth disease. Similarly, the net operating income subindex declined by 22 points to 43 in Q1 2026. This is the lowest level since the end of 2024 and is also underpinned by similar factors.
• The market share subindex deteriorated by 17 points to 54 in Q1 2026. Most respondents across the various subsectors shared this pessimism, and we suspect that the port inefficiencies in Cape Town also added to the downbeat mood.
• The employment subindex declined by 14 points to 39 points in Q1 2026. This mirrors the sector's general sentiment, though it's 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 downbeat mood may also reflect the sector's broader mood amid the pressures of foot-and-mouth disease and the Middle-East issues.
• The capital investments subindex dropped by 20 points from Q4 2025 to 54. This major decline is again more about the sector's general mood than about overall activity. For example, farmers continue to invest in tractors and combine harvesters.
South Africa's tractor sales totalled 669 units in February 2026, up 5% year-on-year. The combine harvester sales were 19 units, up 63% from the previous month. These strong monthly sales follow the January 2026 uptick.
• The sub-index measuring export volumes deteriorated by 25 points from Q4 2025 to 50. Concerns about the impact of the Middle East conflict on logistics, along with rising shipping costs, may be the primary challenges here. Aside from these issues, the production conditions in horticulture and field crops look promising across South Africa.
• The general economic conditions subindex remained fairly resilient, dropping only by a point to 61 in Q1 2026. This lasting sense of optimism is consistent with the country's general macroeconomic sentiment following S&P's credit rating upgrades, South Africa's removal from the FATF grey list, and numerous positive developments stemming from the implementation of Operation Vulindlela.
• The general agricultural conditions subindex fell by 31 points to 39 in Q1 2026. This is the lowest level since the end of 2024. The unfavourable production conditions in the Western Cape during the winter crop season, excessive rainfall in the northeastern parts of the country, and animal diseases are the major issues weighing on agricultural conditions.
Changes in interpretation
• The subindices of the debtor provision for bad debt and financing costs are interpreted differently from the abovementioned indices. A decline is viewed as a favourable development, while an increase signals growing financial strain.
• In Q1 2026, the debtor provision for bad debts indices weakened by 8 points to 39, reflecting tail-end gains from generally large agricultural harvests in the 2024-25 season, mainly in field crops and horticulture. These better financial conditions continue to support agricultural machinery sales. The financing costs index declined by 21 points to 62. This was partly due to the recent decline in interest rates.
The ACI results for Q1 2026 show that all is not well in South Africa's agriculture. The livestock and pig industries are under immense financial pressure because of the diseases, and these results mirror the challenge at hand.
What remains key is a speedy vaccination process that will get the sector off the current worrying path. The Middle East conflict also presents new challenges, complicating exports to the region and putting pressure on fuel and fertiliser prices.
These factors may weigh on the sector as the country approaches the 2026-27 winter crop season and later the 2026-27 summer crop season.
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