April 07, 2014

07/04/14: Farmers confidence

Grain by the Sea
Grain by the Sea (Photo credit: Onno B.)
The latest Rabobank Rural Confidence Survey has found that Australian Farmer confidence has eased for the second consecutive quarter on the back of mixed seasonal conditions, although bright spots exist across the country.

Farmers in Queensland and northern New South Wales had continued to tackle prolonged drought conditions, with cattle producers doing it particularly tough but dairy farmers were fairly content.

The survey found net overall rural confidence eased to near neutral levels this quarter with close to one third of farmers (29 per cent) reporting optimism about the state of the rural economy and close to one third reporting pessimism (27 per cent). A total of 39 per cent of farmers expect similar conditions to last year.

The impact of seasonal conditions on farmer sentiment was more pronounced this quarter with 64 per cent of those expecting conditions to worsen citing the season as cause of their pessimism (up from 40 per cent with that concern previously). Input costs were also raised as a concern by 29 per cent of farmers (from 23 per cent previously), while a quarter of farmers attributed their negative view to the commodity price outlook (down from 33 per cent).

Farmers confident about the year ahead noted seasonal conditions (43 per cent) and commodity prices (34 per cent) as the primary reasons for their optimism - mainly driven by dairy and grain producers. The state of overseas markets was also nominated as a positive factor (by 23 per cent).

While their outlook for the overall rural economy had eased, Australian farmers were generally more bullish about the expectations of their own farm businesses. More than one-third (34 per cent) still held positive views on the performance of their business over the next 12 months, while 18 per cent expected a deterioration in business performance (up from 14 per cent previously).

Farmers reported robust income expectations with 73 per cent of farmers expecting the same or better incomes compared to last year. On the back of record dairy prices recently, dairy farmers held the strongest income outlook with 70 per cent anticipating their incomes to be higher than in 2013.

Australian farmers' investment intentions remained strong with 80 per cent expecting to maintain or increase their level of investment in their farm business over the next 12 months (down marginally from 85 per cent in the previous quarter).

The survey saw mixed results across the states this quarter with some improvement in net sentiment recorded among farmers in South Australia and New South Wales compared to the previous quarter.

Confidence in South Australia was underpinned by strong sentiment among grain growers, who recorded a record harvest as well as sheep producers, who reported improved market dynamics.
English: Orthographic map of Australia centere...
English: Orthographic map of Australia centered at 26.75° S, 133.25° E. Official territory. Claimed territories. (Photo credit: Wikipedia)

For the sixth consecutive survey, farmers in Victoria remained the most optimistic in the country. This was largely underpinned by the positive fundamentals for dairy - particularly over the past 12 months.

Meanwhile, confidence eased among farmers in Western Australia and Tasmania with both states coming off previous highs. WA rural confidence however remains at healthy levels.

Queensland reported the weakest overall rural sentiment with the state's prolonged drought weighing heavily on many of the state's farmers.

Confidence also picked up in the grains industry with many of the nation's farmers harvesting an above-average crop.

Questioning respondents for the first time on human resources, the survey found 56 per cent of Australian farmers reported it difficult or very difficult to attract and retain farm employees. Cane farmers reported the most challenges with farm labour with 71 per cent finding it difficult or very difficult to retain and attract farm employees, while cotton farmers had the least problems in this regard (only 13 per cent reporting difficulties).

Read more here ...
 The Global Miller
This blog is maintained by The Global Miller staff and is supported by the magazine GFMT which is published by Perendale Publishers Limited.

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