The survey, completed last month, found 28 per cent of the nation’s farmers were expecting conditions in the agricultural economy to improve in the coming 12 months.
Australian farmers are increasingly optimistic about the year ahead, with much of this riding on positive sentiment sweeping the sheep and beef sectors, as graziers fetch historically high prices for lamb, mutton, wool and beef – the latest quarterly Rabobank Rural Confidence Survey has found.
The price outlook for dairy and cotton also underpinned the optimism prevailing across Australia’s agri sector, with overall net confidence remaining at positive levels (with more farmers positive than negative) since early 2015. This is the longest period of positive sentiment in the survey’s history.
Meanwhile confidence remained relatively subdued in the grains sector, as pricing woes were compounded by the variable start to the winter cropping season – with planting rains falling short in Western Australia, South Australia and Queensland.
The survey, completed last month, found 28 per cent of the nation’s farmers were expecting conditions in the agricultural economy to improve in the coming 12 months (up slightly from 25 per cent with that view in the previous survey), while 59 per cent were expecting conditions to remain stable – the same reading as last quarter. Those with a pessimistic view of the year ahead stood at just 10 per cent.
Overall, commodity prices remained the biggest driver of prevailing optimism, with 77 per cent of surveyed farmers expecting conditions to improve citing rising commodity prices as reason for their positive outlook – up from 74 per cent in the previous survey.
Rabobank national manager Country Banking Australia Todd Charteris said prices were a particularly strong driver of the bullish sentiment in the sheep and beef sectors, reported by 85 per cent and 83 per cent of sheep and beef graziers, respectively.
“There has rarely been a better time to be a grazier,” he said, “with prices for beef, lamb and mutton continuing to hit new records, and wool prices also at an historical high – albeit back down from its recent peak.”
Mr Charteris said while dairy farmers were also buoyed by their price outlook for the upcoming season, on-farm cash flow is expected to remain tight for the next few months.
Cotton producers were also increasingly upbeat about their prospects.
“Strong price prospects – pegged to remain above $520 per bale in 2017/18 –together with good water availability is shoring up confidence in the cotton sector,” he said.
Unsurprisingly, Mr Charteris said, grain growers were the least bullish about prices, with any support for local wheat prices expected to come from an anticipated softening of the Australian dollar, rather than a shift in global fundamentals.
“As such, we are seeing prices play a part in crop rotations, with an increase in the area planted to canola and pulses, particularly chickpeas and lentils, at the expense of barley and oats,” he said.
Mr Charteris said the season was also stymying confidence in the grains sector, with planting rains falling short in many regions including parts of Western Australia and Queensland, the Eyre Peninsula in South Australia and also northern New South Wales.
