(Australian Associated Press)
Confidence among most Australian farmers remains high nearing the end of 2016, and the agricultural sector is optimistic about 2017.
Agribusiness banking specialist Rabobank’s latest quarterly rural confidence survey shows that farmer confidence has remained at historically high levels for the past quarter, following good seasonal conditions and solid commodity prices.
“Much of the country is experiencing a good season, following the second wettest winter on record, and a wet start to spring,” Rabobank national manager of Country Banking Australia,Todd Charteris said on Monday.
Mr Charteris said market fundamentals for beef, sheep, cotton and sugar had been positive, and the dairy sector had been showing signs of improvement.
The outlook was mixed among grain producers whose expectations of a big crop had been pulled back by frost damage in Western Australia and too much rain in parts of eastern Australia.
But the rain had considerably boosted confidence in the cotton sector, with 62 per cent of producers expecting conditions to improve during 2017.
Mr Charteris said the rain had spurred more dryland planting and had boosted water availability for irrigators, which had facilitated the largest planting in five years. Domestic cotton prices were also favourable.
The Rabobank survey showed that there had been a big turnaround in the confidence of dairy farmers although it was still slightly negative.
Good seasonal conditions and a recovery in prices for dairy commodities had boosted sentiment.
Dairy farmers were still concerned by the outlook for prices, but less so than in the previous quarter.
They expect the 2017/18 season to mark a return to on-farm profitability.
But their expectation of improved financial results lags behind those of other sectors.
Rabobank said the net confidence indicator had remained unchanged following the previous quarter’s significant upswing to strong levels.
The latest survey shows that 36 per cent of farmers continue to expect agricultural economic conditions to improve, compared to 15 per cent expecting them to worsen. Forty-six per cent expect the next 12 months to be similar to the last.
Long-term confidence across the agricultural sector remains strong, with 92 per cent of farmers intending to increase or maintain farm investment levels over the coming 12 months – up from 90 per cent in the previous quarter.