Agribusiness Confidence

After falling for two consecutive quarters, the Agbiz/IDC Agribusiness Confidence Index (ACI) increased by 5 points to 67 in Q4 2025. Favourable weather conditions, strong exports throughout the year on the back of ample grains, oilseeds, and horticulture harvests, as well as better port efficiencies, are among the key drivers of optimism in the sector. We suspect that the announcement of nationwide vaccination of cattle against foot-and-mouth disease also contributed to the upbeat mood, as the disease is a national challenge that, for some time, seemed out of control. The current ACI level of 67 is well above the 50-neutral mark, suggesting that South African agribusinesses are generally optimistic about business conditions in the country. This survey was conducted in the last week of November and covered agribusinesses operating across various agricultural subsectors nationwide.

The ACI comprises 10 subindices. Most increased in Q4 2025, while two declined slightly. Here is the detailed view of the subindices.

• The capital investments subindex increased by 7 points from Q3 to 74. This uptick is well aligned with the encouraging high-frequency data, such as tractor and combine harvester sales, which have remained strong since the start of the year. For example, cumulative tractor sales for the first 10 months of 2025 amounted to 6,122 units, up by 11% year-on-year. Moreover, the cumulative sales of combine harvesters for the same period are up 8% year-on-year, with 197 units sold.

• The sub-index measuring export volumes surged by 32 points from Q3 to 75. This is unsurprising as South Africa's agricultural exports have remained strong since the start of the year despite significant trade policy shifts and uncertainty. For example, the cumulative value of agricultural exports for the first three quarters of the year is US$11.7 billion, representing a 10% increase from the corresponding period in 2024. 

• The general agricultural conditions subindex increased by 4 points to 71 in Q4 2025. The increase highlights optimism about the benefits of La Niña-induced rains in the 2025-26 season, which has recently started. 

• The market share subindex lifted by 11 points to 71 in Q4 2025. Most respondents across the various subsectors shared this optimism and generally aligned with the better agricultural production conditions. 

• The employment subindex increased by 3 points to 53 points in Q4 2025. This mirrors the sector's general employment conditions. For example, while a bit more backward-looking, the number of farm jobs in South Africa  increased slightly from the second quarter of 2025, by 2% to 920k in Q3 2025.

• The general economic conditions subindex improved by 3 points to 62 in Q4 2025. This is consistent with the country's general macroeconomic optimism 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. 

• However, the turnover subindex confidence fell by 4 points from Q3 to 71. This was primarily driven by views from the winter crop-growing regions, which reflect the fact that, while the harvest is relatively large, prices are lower. Still, a level of 71 is quite good and well above the 50-neutral mark. Similarly, the net operating income subindex declined by 6 points to 65 in Q4 2025. 

• 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 Q4 2025, the debtor provision for bad debts indices fell by 3 points to 47, reflecting gains from generally large agricultural harvests in the country, mainly in field crops and horticulture. However, the financing costs index lifted by 12 points to 82. This was surprising, as the recent decline in interest rates has eased the cost of capital in the country. 

In essence, the ACI results for Q4 2025 illustrate generally better conditions in the agricultural sector. "Still, the recovery of the sector this year will likely be uneven. We see better production conditions in the horticulture and field crops. However, the livestock industry is under pressure due to foot-and-mouth disease. What will help in the recovery going into 2026 will be the speedy vaccination process against foot-and-mouth disease in the roughly 12-million national herd of cattle, with 7.2 million of them in commercial production. Moreover, the La Niña rains will help in horticulture and field crops," said Wandile Sihlobo, chief economist of the Agricultural Business Chamber of SA (Agbiz). "Also important are the collaborative efforts between business and government on pushing for better management of the municipalities, addressing rural crime, and the release of the government-owned land to appropriately selected beneficiaries. This is key for long-term expansion in the sector," added Sihlobo.

ISSUED BY:

Wandile Sihlobo

Chief Economist, Agricultural Business Chamber of South Africa (Agbiz)

E-mail: wandile@agbiz.co.za