South Africa’s biggest employer in a world of pain

Ongoing floods and a cattle disease outbreak in part of the country are placing pressure on South Africa’s agricultural industry, while the looming threat of United States tariffs still hangs over the industry.

Standard Bank’s Group Head of South Africa Macroeconomic Research, Elna Moolman, explained that while food inflation is currently benign, there are some risks to the outlook that should be monitored.

In particular, she noted that it is important to monitor the impact of regional floods quite closely, as this could affect certain crops.

South Africa has seen widespread rains over the past few weeks, with severe flooding in certain parts of the country.

This severe weather has affected Limpopo, Mpumalanga, KwaZulu-Natal, the Eastern Cape, and the North West in particular.

It has resulted in a loss of life and severe damage to infrastructure and property in these areas, with the government recently having classified the floods as a National Disaster under the Disaster Management Act.

Agricultural economist Wandile Sihlobo explained that, so far, the widespread rains seen across the country have benefited agricultural activity.

“In the summer grains and oilseeds regions, the farmers have been able to plant a sizable area, and some are at the tail end of the planting,” Sihlobo wrote on his website on 9 January 2026. 

“There is no panic, and we should be able to meet the expected area of 4.5 million hectares, up 1% from the 2024/25 season.”

While he noted that some regions are “excessively wet”, particularly KwaZulu-Natal and the northern Eastern Cape, he said there are no concerns that this would negatively affect crops.

However, he said the southern Eastern Cape may be a cause for concern, as it has not received much rain at all and will, therefore, require close monitoring.

In a post on social media platform X on 17 January, Sihlobo described the floods in Limpopo as “devastating”, noting that infrastructure has been damaged in some areas. 

“There is also a disruption in the agricultural activity.  But we do not think the damage changes much the optimistic picture of agricultural growth in 2026 that we have highlighted on various occasions before,” he said. 

“We remain confident about agricultural growth in 2026, as field crops and horticulture in other provinces remain in good condition.”

“The one area we should all watch is vegetable price inflation, but that will depend on the scale of the floods’ impact. We are yet to get a better picture of this.”

More pressure

At the same time, South Africa’s livestock industry is currently under severe pressure due to a devastating foot-and-mouth disease (FMD) outbreak.

The FMB outbreak has forced farmers across the country to euthanise their cattle, which is set to severely affect South Africa’s meat and dairy industries.

Agriculture Minister John Steenhuisen has unveiled a long-term strategy aiming to have the country declared free of the disease by 2036, which includes live-tracking systems and vaccine plans.

“We are also hoping for a better recovery in the livestock industry when cattle vaccination gains momentum, and yes, there remains great complexity here,” Sihlobo said in his social media post.

Farmers have called on the government to also classify the FMD outbreak as a national disaster in terms of the Disaster Management Act.

The Southern Africa Agri Initiative (Saai) said this would bring critical benefits to struggling farmers and accelerate the containment of the outbreak.

Saai added that the financial survival of family farmers must be placed at the centre of all efforts to combat the disease and to limit its severe economic impact.

This comes at a time when the threat of severe tariffs from the United States looms over South Africa’s agricultural sector.

While the validity of these tariffs is still under review by the US Supreme Court, United States President Donald Trump has threatened to implement levies as high as 30% on goods imported from South Africa.

This presents a significant risk for South Africa’s agricultural industry in particular, with the United States being one of the sector’s key export destinations.

South Africa’s local agricultural sector is highly export-dependent, and the US is a significant trading partner, accounting for around 7.7% of the country’s exports in 2024.

Although agricultural exports only constitute a small share of the total, they are fully exposed to the new tariffs, with citrus, sugar, and wine among the most affected.

This is because they not only face a 30% tariff but also because competing products from other regions face lower tariffs, making South African products significantly less attractive.

The Reserve Bank previously warned that the loss of jobs and incomes resulting from this could “decimate” some rural communities.