Confidence high among Aussie Farmers: Rabobank

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A survey of Australian farmers shows a collective optimism across the industry, with favourable dispositions seen in all agricultural sectors

Confidence high among Aussie Farmers: Rabobank
Bright Skies: Rabobank says Australian farmer sentiment in the March quarter is in the top ten of the most positive results ever received in its 20-year history

 

The survey, conducted by Rabobank, was released today and indicates the confidence of Australian farmers remains at historically-high levels despite the wide-reaching implications of the COVID-19 pandemic.

Such a fervent outlook within the farming fraternity follows a near-record winter harvest and ideal growing conditions, notably in the country’s eastern growing fields.

While general optimism has eased slightly from a more positive December outlook, farmers are overwhelmingly confident, with 39 per cent expecting conditions in the agricultural economy to improve in the next year.

Over half of farmers (51 per cent) expect the conditions to remain stable while just seven per cent have a pessimistic outlook on the year ahead.

Much of the confidence held by those within the agricultural industry points toward their collective ability to respond from last year’s drought-affected harvests, according to Rabobank Australia CEO, Peter Knoblanche.

"The recovery from drought and the return to production over the past 12 months has been extraordinary, despite the uncertainties around COVID-19," Knoblanche says.

"Australian grain growers delivered a record wheat harvest and near-record total winter grain harvest last season and there are promising early signs as farmers start making plans to plant this year’s crop.

"Livestock prices are breaking all sorts of records because the demand for sheep and cattle is so strong and there just aren’t the numbers to meet that demand. That is proving a challenge to those farmers trying to rebuild herd and flock numbers after the drought but providing good returns for farmers who held onto stock through the dry years.

"This year it seems all the fundamentals are lining up. We’ve had near-perfect seasonal conditions over summer for much of the country and commodity prices are very solid. Combined with low interest-rates and a number of government incentives, farmers are generally speaking in a good place right now."

As a result of the favourable seasonal conditions and high-yield harvests, the March quarter survey result has one of the top ten confidence levels in the survey's 20-year history.

As a result, agricultural business conditions continue to climb with the farm viability index, which measures farmers’ assessments of their own viability, now reaching a new record; having eclipsed the existing benchmark set last quarter.

Uncertainty caused by COVD-19 is not seen as a significant barrier among farmers, with only ten per cent of farmers who expected regression in conditions citing the pandemic as a reason.

Instead, the survey reflects an overwhelming sense of resilience from farmers, with industry at large remaining relatively unscathed economically notwithstanding the challenges faced in the horticulture and wool sectors.

Other results of the survey showed 68 per cent of farmers anticipated conditions to keep on improving (up from 54 per cent) and a prevalent optimism in sectors such as grain and cotton.

Knoblanche says many basics were aligning across the industry and detailed many sectors where sentiment remains high.

"Australian grain growers delivered a record wheat harvest and near-record total winter grain harvest last season and there are promising early signs as farmers start making plans to plant this year’s crop," says Knoblanche.

"Livestock prices are breaking all sorts of records because the demand for sheep and cattle is so strong and there just aren’t the numbers to meet that demand.

"That is proving a challenge to those farmers trying to rebuild herd and flock numbers after the drought but providing good returns for farmers who held onto stock through the dry years.

"This year it seems all the fundamentals are lining up. We’ve had near-perfect seasonal conditions over summer for much of the country and commodity prices are very solid. Combined with low interest-rates and a number of government incentives, farmers are generally speaking in a good place right now."

From an economic standpoint, the survey held a similar level of belief with 41 per cent of farmers expecting an increase in gross-farm income in the year ahead, including New South Wales – the state most anticipating higher returns, while the cotton sector also felt they would also fare well financially.

This anticipated injection of income will likely have flow-on effects too, with the increase in income enabling farmers to invest in their farms over the next year. In fact, 36 per cent of farmers had planning on investing money back into their business through things such as infrastructure (65 per cent), machinery and equipment (46) and property (26).

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