Agribusiness confidence slips amid rising concerns over trade and disease

The latest Agbiz/IDC Agribusiness Confidence Index (ACI) released on Monday has revealed a decline for the second consecutive quarter, dropping by 2 points to 63 in the third quarter of 2025.

This decline is indicative of growing concerns among stakeholders, particularly regarding the impacts of Foot and Mouth Disease and trade frictions with the United States, which have emerged as significant challenges for the sector.

Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), pointed out that while there are ongoing issues such as poor municipal service delivery and sluggish progress in granting government land title deeds, these limitations have not entirely overshadowed the optimism within the agribusiness community.

He noted that the current level of the ACI still reflects a general buoyancy about business conditions.

“The favourable 2024-25 summer rains and improvements at the ports, which have facilitated exports with minimal interruptions, are positives,” Sihlobo said, adding that the winter crop season is also shaping up well for the 2025-26 harvest.

The ACI is composed of ten subindices, with five experiencing declines in Q3 2025. Notably, the market share subindex fell by six points to 59, indicating a somewhat stable outlook among respondents despite the challenges.

Conversely, the employment subindex saw a significant drop of 5 points to 50, mirroring broader employment trends within the sector, where the number of farm jobs decreased by 3% to 906 000 during the last quarter, primarily affecting the livestock industry, certain field crops, and aquaculture.

Adding to the mixed results, the capital investments subindex declined by 8 points to 67, a decrease that caught many off guard given the robust sales data for tractors and combine harvesters since the beginning of the year.

Meanwhile, the export volumes subindex plummeted by 17 points to 43, reflecting persistent concerns regarding the international trade landscape, particularly with the US.

Sihlobo highlighted that, despite these setbacks, the general agricultural conditions subindex remains relatively high at 67, buffered by the beneficial effects of the recent summer rains and advantageous winter rainfall for upcoming crop seasons.

On a brighter note, the turnover subindex rose significantly by 20 points to 75 in Q3 2025, indicating marked improvements particularly in the summer and winter grain regions, as well as within agribusinesses operating in the financial services sector.

Additionally, the general economic conditions subindex saw an uptick of 8 points to reach 58, although interpretations of the underlying factors varied, with declines in debtor provision for bad debt being viewed as favourable.

Despite this generally positive outlook, Sihlobo cautioned that the recovery within South Africa's farming sector is likely to be uneven in 2025, particularly impacting the livestock subsector.

Farming association TLU SA general manager, Bennie van Zyl, said there were some specific issues that have an impact on the confidence sector.

"Especially when international markets are disturbed one way or another, you have a problem. Therefore, we have to make sure that we apply the right policy environment," he said.

"And for us, that is a great concern. Even with foot and mouth disease, it's a crucial issue that has an impact on, especially our meat producers."

Van Zyl added that there's so much unemployment in the country and it cannot be addressed if the economy does not grow.

“If the government brings the right policy to the table, then the private sector, if you allow them, will bring a difference to this country, what we need.”

BUSINESS REPORT