Australian farmers expect to end the year with a positive outlook owing to high commodity prices, low-interest rates, and favourable seasonal conditions, according to a Rabobank survey.
Here are the key results of the survey:
- About 84 per cent of Australian farmers polled said they expect the agricultural economy to perform at or above its current excellent levels in the coming year.
- Over 35 per cent of farmers surveyed nationally were expecting conditions in the agricultural economy to improve over the year ahead.
- A further 49 per cent of respondents reported they were expecting farm business conditions to remain stable over the coming 12 months.
- About 13 per cent expect conditions will worsen.
Rabobank Australia CEO Peter Knoblanche said strong demand for Australian commodities, good seasons and favourable business settings supported solid, long-term confidence.
However, he cautioned that this would likely be diminished among grain growers and other flood-affected producers heading into the end of the year.
“Overall, there is significant long-term positivity in Australia’sAustralia’s farm sector – we see it in the high levels of farm viability reported, in farmers’ strong investment plans, and the optimism about the year ahead,” he said.
“But while above-average rainfall has been a blessing in some sectors, it has caused significant heartbreak in others.
“The full extent of the damage to this year’s east coast winter grain harvest, in particular, is still being assessed, and it’s unclear yet just how much grain has been downgraded to feed quality and how much will be heartbreaking.
“This is particularly heartbreaking for grain growers as they were very optimistic about this year’s crop – it had enormous potential in both yield and value,” he said.
In line with an overall easing of sentiment, Australian farmers have slightly revised their forecasts for their financial performance.
According to the most recent survey, 47 per cent of those polled expect their gross farm income to rise in the coming year (up from 51 per cent in the previous year), while 40 per cent expect earnings to stay flat.
Mr Knoblanche said that assessments of the damage to large areas of rain and flood-affected crops were still ongoing and that the returns for those affected in the grains sector would be significantly impacted.
The survey also found that farmers were still looking for expansion and investment opportunities in general. On-farm projects and infrastructure that increase productivity, efficiency, and ease labour pressures were favoured.
Optimism takes a hit after recent floods
Before the latest flooding, Queensland and New South Wales producers were the most optimistic about business conditions in the coming year, with 90 per cent and 88 per cent, respectively, expecting conditions to remain good or improve further in the coming year.
According to Mr Knoblanche, recent rainfall in Queensland is viewed as having more positive than negative impacts by many producers. As summer approaches, it will be a boon for the state’s pastoral industry.
The effects of recent rainfall and flooding in NSW have been mixed, with croppers in the Central and North West regions enduring most of the damage.
Sentiment eases, but WA farmers are still confident
Farmer confidence in Western Australia fell from 10-year highs in the previous quarter but remained positive in the most recent survey, with a record harvest forecast for the state.
Mr Knoblanche said rising input costs and the impacts of a frost event in spring appeared to have taken some of the edges off farmer confidence in the west. “But to a large degree it is probably a case of farmers there thinking things can’t get much better than they are right now,” he said.
Sentiment also declined, though it remained relatively strong in South Australia, with the state’s producers missing out on crucial spring rainfall and optimism about the year ahead waning among grain growers in particular.
The spirits of Tasmanian farmers remain high
Tasmanian rural confidence also eased slightly but was still tracking at extreme levels, with 90 per cent of the state’s farmers expecting a continuation or improvement in the current excellent business conditions.
Victoria’s farmers are holding on to their positive outlook
Wet conditions have not significantly dented confidence among farmers in Victoria, although sentiment has eased during the latest quarter. Workforce shortages and rising input costs are shaping up as concerns in 2022.
Rabobank regional manager for Southern Victoria, Deborah Maskell-Davies, said overall business conditions were perfect across most regions in Victoria, with excellent commodity prices in most sectors keeping farmers optimistic about the year ahead.
“Producer confidence across the state is still very good. Livestock prices have assured good income levels, and rapidly-increasing land values, with record prices in nearly all sales, are boosting that confidence,” she said.
“It was a cool and grey spring however and grain and pasture growers are certainly looking for some consistently warm, sunny days to support final maturing of crops and good harvesting conditions later this month.”
About the survey
A comprehensive monitor of outlook and sentiment in Australian rural industries, the Rabobank Rural Confidence Survey questions an average of 1,000 primary producers across a wide range of commodities and geographical areas throughout Australia every quarter.