A confidence survey by Rabobank reveals rural confidence in NSW and QLD has taken a beating following recent sub-par seasonal conditions while WA has recorded its highest sentiment in two years.
The quarterly report also shows overall national farmer confidence has remained robust, with the net rural confidence measure still at its highest level since June 2011.
The survey, completed last month, shows 76 per cent of the nation’s farmers expect conditions in the agricultural economy to either improve or remain stable.
Of these, 27 per cent expected conditions to improve while 19 per cent expected conditions to deteriorate. (down from 21 per cent from last quarter). A total of 49 per cent expect similar conditions to last year.
Rabobank Australia acting CEO Peter Knoblanche says rural confidence remained sound, however sentiment was driven by seasonal conditions which are disparate across the country.
“Farmers in Western Australia are buoyant about their prospects, with timely rains setting them up for a magnificent harvest, while farmers in New South Wales are facing more difficult conditions – with dry conditions and frost downgrading crop yields and pasture growth potential,” he says.
“Although Queensland rural confidence inched up on the back of signs of improving seasonal and market conditions, farmer sentiment remains hard hit by the dry conditions that have prevailed across much of the western and central districts.”
Of the 19 per cent expecting worsening conditions, 40 per cent cited seasonal conditions to be the contributing factor; up from 21 per cent last quarter. The majority of unhappy campers hail from NSW and QLD.
However, 32 per cent of those who reported positive outlook on the coming year also cited seasonal conditions as the driving factor, showing the disparity in conditions across the country.
Some other findings of the survey include:
- 33 per cent with a negative outlook for next year nominated commodity prices as a driving factor.
- Producers remain positive about the outlook for their farm business performance – with the net indicator for this emasure remaining stable at 20 per cent.
- One in-three farmers expect higher incomes over the coming year
- By sector, dairy farmers were the most positive about the coming year with farmgate milk prices tipped to be at least 30 per cent up on last eyar.
- Cotton grower sentiment fell this quarter to just below neutral levels after reporting the strongest confidence of all sectors last quarter.
The Rabobank Rural Confidence Survey questions an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia each quarter.
The next report will be released in March 2014.