AUSTRALIAN farmer confidence has improved marginally thanks to an easing of commodity price and input cost concerns; however, it remains in negative territory across the board.
The latest quarterly Rabobank Rural Confidence Survey, released in June, saw confidence lift nationally from -25 per cent to -22 per cent.
Rabobank group executive for Country Banking Australia, Marcel van Doremaele, said the survey paints a picture of how farming conditions across the nation drive a range of confidence levels, with confidence stabilising in SA.
“Farmers have ridden a rollercoaster of seasons, historically high commodity prices and eye-watering input costs in recent years,” Mr van Doremaele said.
“Now, as the heat comes out of many commodities and input prices ease, farmers are adjusting their outlook in response to ‘normalisation’ of economic conditions.
“Seasonally, they’re still experiencing a mixed bag on a national level, which also drives a conservative outlook. The mention of El Niño weather patterns also tempers confidence.
“Many grain growing regions in SA and WA had a dry start to planting – although since the survey was conducted, there’s been some great rainfall to really kickstart winter crops, whereas in Victoria early opening rains on the back of strong sub soil moisture underpinned a positive outlook for the 2023 crop.”
Sugar, beef, dairy and cotton producers all had improved outlooks in the latest survey.
Confidence in the beef sector nationally improved from -29 per cent to -21 per cent, with falling commodity prices, government interventions and policies, rising interest rates and drought still a cause for concern.
Confidence took a hit in the sheep industry, where 40 per cent of producers expect the agricultural economy to worsen, up from 35 per cent in the first quarter of 2023.
The grains industry also experienced a dip in confidence, falling from -19 per cent to -25 per cent due to concerns about drought, falling commodity prices, rising input costs and rising interest rates.
Notably, concerns about drought were up, and 42 per cent of grain growers nationally who were pessimistic nominated it as a reason for worsening conditions compared with 18 per cent in the previous quarter, after a dry start to the planting in many grain growing regions.
Despite marginally higher confidence, Australian farmers remain cautious about increasing investment in their farm businesses, with fewer respondents expecting to increase their investment over the next 12 months.
“Farmers across the country are realigning their investment intentions and focusing spending on projects that will deliver essential productivity gains, including labour-saving infrastructure and technologies,” Mr van Doremaele said
“There’s also an ongoing focus on investments which will strengthen their seasonal resilience.”
The Rabobank Rural Confidence Survey has been conducted since 2000 by an independent research organisation, questioning an average 1000 primary producers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis.
The next results are scheduled for release in this month.
