Farmer confidence steady: Rabobank

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Uncertainty about trade, the global economy and impacts on commodities – such as wool, beef and barley – has brought farm sentiment back from historic highs recorded earlier in the year

Farmer confidence steady: Rabobank
Cotton growers were the most optimistic group of farmers in the most recent Rabobank Rural Confidence Survey. Image courtesy Alamy

 

Farmers are still upbeat about the future outlook for agriculture and their own businesses in 2020, according to the latest Rabobank Rural Confidence Survey, released in June.

The survey, which takes in the view of about 1000 primary producers across Australia on a quarterly basis, found 33 per cent of farmers were expecting conditions in the agricultural economy to improve in the 2020-21 financial year.

This was a fall from the 46 per cent who expressed a positive view in the March quarter, while the numbers of those expecting things to get worse increased from 15 per cent to 23 per cent in June.


Check out the March survey results here


Of those, 47 per cent were most worried about a fall in commodity prices, while the impact of COVID-19 was identified by another 28 per cent of producers as a reason to be pessimistic.

Rabobank Australia CEO Peter Knoblanche says better seasonal conditions and good commodity prices led to a boost in confidence despite the COVID-19 outbreak – with the survey saying only 8 per cent had experienced a "major negative impact" due to the disease.

Among farmers, the survey found cotton growers were the most optimistic, with 44 per cent expecting an improvement, up from 27 per cent in March.

This follows strong autumn rainfall in the Murray-Darling Basin coupled with a positive winter rainfall outlook.

Grain growers were also optimistic, with 42 per cent of growers nationally reporting an improvement in business sentiment, and beef producers were 35 per cent positive, 31 per cent of surveyed dairy farmers were expecting conditions to worsen.

Poor wool prices meant sentiment among sheep growers fell – with 23 per cent expecting and improvement (down from 36 per cent in March) and 36 per cent expecting things to get worse – up from 18 per cent.

Knoblanche says forecasts predict a bumper winter harvest, saying that this will be positive news for crop growers.

"Livestock rebuilding is also underway and confidence among beef and sheepmeat producers is generally very good, particularly in light of excellent prices at the moment," he says.

Another 33 per cent of respondents expect a rise in gross farm income over the next 12 months – compared with 38 per cent in the last quarter – though this number rises to 49 per cent of grain farmers.

Nationwide, 25 per cent of those farmers surveyed plan to invest further in their business, with the bulk of investment was earmarked for on-farm infrastructure.

Knoblanche says this is a sign of underlying farm confidence in the year ahead and beyond.

"With seasonal conditions on the side of the farm sector this year, farmers are looking forward to increased returns and being able to invest in their enterprises," he says.

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