Economic sentiment among South African agricultural businesses turned pessimistic in the first quarter of the year, according to the latest Agbiz/IDC Agribusiness Confidence Index (ACI) which plunged 18 points to 49 from the previous quarter.
The latest reading marks the lowest level of confidence since Q3 of 2024.
This level, just below the 50-mark neutral threshold, reflects growing concerns across the sector following a period of recovery in much of 2025.
The survey, conducted in the first week of March 2026 among agribusinesses in various subsectors nationwide, highlighted several key pressures.
“The spreading of foot-and-mouth disease, which continues to impose immense financial pressure on the cattle industry; African swine fever in the pig industry; and pressures from lower global prices in the sugar and wheat industries are amongst the key constraints that some respondents highlighted as major risks weighing on sentiment," Agbiz chief economist Wandile Sihlobo says in the report.
“Moreover, rising concerns about the impact of the Middle East conflict on energy and fertiliser prices also added to the downbeat mood in the sector.”
Most of the ACI's 10 subindices deteriorated in Q1. Turnover confidence fell 21 points to 50, driven by poor winter crop yields in regions facing low global wheat prices and disease issues in beef and dairy. Net operating income dropped 22 points to 43 – the lowest since late 2024 – for similar reasons.
Confidence regarding market share weakened by 17 points to 54, with widespread pessimism potentially exacerbated by port inefficiencies in Cape Town.
The employment subindex declined 14 points to 39, mirroring broader sentiment despite livestock's smaller role in job creation compared with horticulture, wine and field crops.
According to the index, the capital investment subindex fell 20 points to 54, although actual activity remained resilient: tractor sales reached 669 units in February 2026 (up 5% year-on-year), and combine harvester sales hit 19 units (up 63% month-on-month).
However, the export volumes subindex deteriorated sharply by 25 points to 50, amid concerns over Middle East-related logistics disruptions and rising shipping costs, despite promising production in horticulture and field crops.
General economic conditions held relatively steady, dipping just one point to 61, buoyed by macroeconomic positives such as S&P credit rating upgrades, removal from the Financial Action Task Force grey list, and Operation Vulindlela reforms.
General agricultural conditions plunged 31 points to 39 – the lowest since the end of 2024 – due to unfavourable winter conditions in the Western Cape, excessive rain in northeastern areas, and animal diseases.
"The ACI results for Q1 2026 show all is not well in South Africa's agriculture," said Sihlobo.
“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 us off the current worrying path.
“The Middle East conflict also presents new challenges, complicating our exports to the region and putting pressure on fuel and fertiliser prices. These factors may weigh on the sector as we approach the 2026-27 winter crop season and later in the 2026-27 summer crop season.”
