Australian farmers are collectively confident for a productive year ahead, according to Rabobank’s quarterly rural confidence survey.
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Confidence among Australian farmers remains strong with favourable conditions and good commodity prices influencing the positive outlook
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Released today, the survey shows an overwhelming majority of farmers feel assured within the country’s farming sector – a result that follows strong commodity prices and another favourable start to the season.
Rabobank Australia chief executive Peter Knoblanche says the survey painted an overall encouraging depiction of the country’s agricultural sector.
“There is certainly a view out there among many farmers that business conditions right now are excellent. Many would say it’s as good as it gets, and they can’t see how it could get any better,” he says
“Strong prices for grain and terrific growing conditions in most regions have driven another near-record winter crop planting program across the country, with early estimates for a second-straight year of bumper tonnages of wheat, barley and canola when harvested at the end of the year.
“Meanwhile commodity prices in the beef and lamb sectors are also supporting producer confidence, with low supply and high demand for protein pushing prices to levels not seen before. And dairy confidence is also strong on the back of favourable milk price contracts and improved water allocations.”
The survey reveals almost 90 per cent of Australian farmers are anticipating excellent business conditions currently being felt throughout the sector to prolong or improve across the year ahead.
It also said 35 per cent of farmers are expecting conditions in the agricultural economy to improve across the next year – a five per cent decrease since the last survey, released in March – while a further 54 per cent predicted the current positive conditions would continue for the coming 12 months.
Just eight per cent expected deterioration in current conditions.
Such optimism across all sectors wasn’t deterred by the ongoing mouse plague throughout New South Wales which didn’t register as a major concern in the survey but instead looked favourable on beef, lamb and dairy areas – which were buoyed by high commodity prices – and cotton and grain producers – which raised sentiment following great seasonal conditions.
In fact, 69 per cent of farmers expecting conditions to improve cited high commodity prices in the survey while 51 per cent of respondents cited seasonal conditions to influence the outlook.
Tasmanian farmers were the most confident of any state or territory around the country, with 45 per cent tipping conditions to improve. Farm confidence on the apple isle has now hit a six-year high, with Rabobank suggesting optimism within the dairy industry as the main reason behind the positivity.
New South Wales, following boosts to water allocations and another potentially large grain crop, also showed high levels of optimism (44 per cent), while ‘the best start in a decade’ for Western Australia’s winter cropping season drove confidence in the west.
After many years of drought, Queensland rural confidence reached its fifth-highest level in 20-years while confidence remained high in South Australia despite notions easing slightly following a dry run into winter. In Victoria, record-breaking prices in livestock and dairy helped improve temperament against low rainfall and labour shortages in the state.
Among grain producers, 57 per cent expected a similar year as last year while 34 per cent foreshadowed improvement in the industry and with a two per cent increase in hectares of crops this year, the sentiment of farmers may be accurate.
For cotton farmers, 86 per cent were expecting a better year than last – a 43 per cent surge since March – following a boost in water supplies while livestock farmer’s optimism also remains high as prices continue to reach heights not seen in the Australian market before.
In Dairy, 34 per cent expect improvements in conditions on the back of strong milk prices and investment in dairy infrastructure.
“For most farmers, we are seeing a second year of very good seasonal conditions, high to very high commodity prices, low-interest rates and favourable infrastructure investment incentives from the government,” Knoblanche says.
“The benefit of another year like this for Australian farming shouldn’t be under-estimated. This will allow many farmers to really consolidate their position after years of drought – to further reinvest in their businesses to make them more efficient and resilient and to expand and grow their businesses for the future.
“This is a sector which has made an excellent recovery after the drought and is helping power the nation through the challenges of the COVID-19 pandemic.
“Many of our country towns are booming, there is tremendous regional growth and employment and the strength and stability in the agricultural sector is playing a significant part in that.”
With another strong year likely ahead, many farmers across the country are also set to benefit financially and invest back into their operations.
40 per cent expected increases in gross farm incomes over the next year while 45 per cent expected similar incomes to last year.
Nationally, 34 per cent outlined their intentions to increase investment while 60 per cent would maintain their current business spending. On-farm infrastructure was cited as the main investment area, followed by new plant and machinery.