Ag outlook mixed: Rabobank survey
Cotton grower confidence has improved thanks to recharged water storages, while those in the beef sector
remain concerned about rising input costs.
These were just some of the findings from Rabobank’s latest Rural Confidence Survey released this week.
Australia’s most comprehensive monitor of rural industries outlook and sentiment also reported that Australian farmer confidence improved slightly – up from -25 in the first quarter this year to now sit at -22 per cent.
This marginal improvement in confidence lifts the levels from the lowest point since late 2018 and comes as concerns about commodity prices and input costs ease slightly.
Other concerns at the forefront of producers minds’ include interest rates and the dry start to the year in some states.
The national improvement in confidence comes off the back of a sharp lift in Queensland – it’s now at -11 per cent compared to -30 per cent last quarter.
Seasonal conditions and commodity prices have driven this turnaround in sentiment.
Confidence also slightly improved in Victoria, while it stabilised in South Australia and New South Wales and dropped significantly in Tasmania and Western Australia.
About half of the farmers surveyed expected no change to the performance of the Australian agricultural economy during the next 12 months, with 13 per cent anticipating an improvement and 35 per cent expected conditions to deteriorate.
The sugar industry was the only commodity where confidence moved back into positive territory, it’s now at 22 per cent, an improvement from -28 per cent last quarter.
This is in response to high sugar prices.
Beef confidence improved slightly but rising input costs and falling commodity prices still weigh on producers’ minds.
Australian beef producers were the most concerned, out of all sectors, about government interventions/policies, rising interest rates and drought.
Dairy confidence increased from -22 per cent to -15 per cent despite reduced farmgate milk prices.
Cotton grower confidence improved to -20 per cent compared to -59 per cent last quarter.
In contrast, sheep producer confidence dived.
Forty per cent of producers expect the agricultural economy to worsen, this is down from 35 per cent last quarter and off the back of falling commodity prices, rising costs and concerns about overseas markets and economies.
Grain industry confidence also declined with growers citing concerns about drought, falling commodity prices, rising interest rates and costs.