War and disease shape SA agriculture’s first quarter — but there are positives

South Africa’s agriculture had a mixed experience in the first quarter of 2026. We see both positive and negative developments, which equally continue to shape the operating conditions for farming businesses.

On the negative side, foot-and-mouth disease remains a major challenge for the livestock industry. The procurement of vaccines and their distribution to the various regions is ongoing but requires greater momentum, as many areas of the country are under financial strain. The disease has also led to the temporary closure of various export markets and added further financial strain on farming businesses.

Another new event, adding additional pressure to the sector, is the Middle East war. The shocks of the war are reflected in higher input costs and the disruptions they create in export markets.

South Africa imports roughly 80% of its annual fertiliser requirements, exposing the country to both supply and price shocks in times of crisis, as we are in now. The Middle East accounts for roughly a third of the key fertiliser ingredient, nitrogen, and the war limits the movement of these supplies to the world market, leading to a surge in prices.

Moreover, South Africa is dependent on fuel imports, which further strains the farming sector. Combined, fertiliser and fuel account for nearly half of input costs in several crops.

What is key right now is whether this war continues for longer or ends sooner. The 2026-27 production year for summer crops in South Africa starts in October, and if we go past June with this war raging, we will start to worry more about the pressures on farm input costs and about the physical supply of fertiliser. For now, we can weather the storm for a few months, since we are not in a higher fertiliser-use period.

On the positive side, we are seeing the value of pushing for the extension of the African Growth and Opportunity Act (Agoa) in South Africa’s agriculture. Indeed, when the Department of Trade, Industry and Competition (DTIC), along with some business leaders, was pushing for this extension, others, understandably, criticised the value of Agoa, as the “Liberation Day” tariffs eroded its benefits.

Without Agoa, South African products exported to the US would typically face an additional 3.4% tariff on top of the “Liberation Day” tariffs, which were 30%, bringing the total to 33.4%.

The difference between these higher tariffs did not make material sense, as businesses were already under pressure.

But when the US Supreme Court ruled that President Donald Trump’s “Liberation Day” tariffs, imposed in 2025, were unconstitutional and exceeded the president’s authority, we suddenly realised that the push for Agoa has benefits.

In reaction to the supreme court ruling, the US president lowered his tariffs to 10% (and may increase to 15% at some point). Thus, South Africa’s agriculture is now at the same level as its competitors in South America, including Chile and Peru.

This places South Africa in a better position than the second half of 2025. We can compete fairly. We are approaching the citrus export season and have ample wine supplies. If the tariffs remain at these levels for some time, we may have a better export season to the US, which would be a positive development compared with a year ago.

Had we not been included in the Agoa extension, we would now be facing a 13.4% tariff (10% plus the MFN tariff of 3.4%). Therefore, with all the headaches that came with its push for renewal, it was a key matter, and we congratulate the folks at DTIC, business and other stakeholders who pushed for it, as well as South Africa’s continued inclusion.

Of course, this is not the end of the road; the idea is to have a formal trade agreement with the US after these uncertain times. For South Africa’s agriculture, the US remains an important market, accounting for 4% of our agricultural exports.

Another positive development is in field crop production conditions in South Africa, which continue to show decent yields. For example, the 2025-26 summer grains and oilseeds crop forecasts paint an upbeat picture about the harvest size.

Admittedly, we must view these estimates with some caution, as the season is still in its early days and production conditions can change. Still, the data we received on 26 March 2026 from the Crop Estimates Committee, placing South Africa’s 2025-26 summer grains and oilseeds production estimate at 20.3 million tonnes, which is 1% less than the 2024-25 production season, is comforting.

We must not forget that the 2024-25 summer grains and oilseeds were the second-largest on record; therefore, being marginally lower than they were is not cause for concern but rather for comfort. This production figure comprises maize, sunflower seed, soybean, groundnuts, sorghum and dry beans.

We see minor annual downward revisions in most crops, except for sunflower seed and groundnuts. We also see decent production levels in various fruits and vegetables, and broad improvement in the grazing veld, all of which benefit from the La Niña rains in the 2025-26 summer season.

Ultimately, we are ending the first quarter of 2026 on a mixed footing, with both domestic and global events shaping the operating conditions. Still, we remain optimistic that, at a high level, the year may prove positive for South Africa’s agriculture. DM

Wandile Sihlobo, a member of the Presidential Economic Advisory Council, is presidential envoy on agriculture and land. He is chief economist at the Agricultural Business Chamber of South Africa and a senior fellow in Stellenbosch University’s department of agricultural economics.