Farmer confidence down, Rabobank says

By Country News

Heightened concerns over the continuing dry weather have driven down confidence among the nation’s farmers to a five-year low, the latest Rabobank Rural Confidence Survey has revealed.

Yet sentiment has held steady among Victoria’s farmers, bucking the national trend.

Released last week, the survey found the state’s grain and sheep producers to be the most positive about their prospects, while the state’s dairy farmers posted the largest upswing in confidence.

The survey found 20 per cent of dairy farmers surveyed were expecting improving economic conditions in the coming year and 54 per cent were expecting stable conditions.

‘‘A full-season milk price well and truly in the six dollars is potentially on the cards, with a number of dairy companies releasing opening prices between $5.60 and $6 per kilogram of milk solids and the market eagerly awaiting Saputo,’’ Rabobank southern Victoria and Tasmania regional manager Hamish McAlpin said.

‘‘As a starting line, these prices should deliver pretty good margins, particularly if we have an average or normal spring.’’

Mr McAlpin said with a fair bit of movement continuing between processors, domestic competition for milk remained strong and was helping underpin prices.

Dry seasonal conditions still weighed on the state’s rural sentiment, however, and was cited by 75 per cent of farmers with a negative outlook as a reason for concern.

Mr McAlpin said there had been a heightened level of anxiety about the dry season, but recent rains had fallen in the nick of time to put the winter crop back on track, with follow-up rain critical.

Grain growers appeared to be the most positive about the coming 12 months, with 29 per cent expecting agricultural economic conditions to improve.

Sheep producers also retained a relatively optimistic view on the year ahead, but in the beef sector it was a different story, with 49 per cent expecting economic conditions to deteriorate.

‘‘While the season has been tough for graziers, with many feeding and offloading older classes of stock, record wool and high lamb and mutton prices are providing the incentive to feed sheep,’’ Mr McAlpin said.

‘‘But in beef, cattle prices haven’t held up as well, although they are still above long-term averages.’’