News

Farm confidence takes a hit

By Country News

Victorian farmer confidence has dropped to near-decade lows as the state’s agricultural producers report heightened concerns around the drought, the latest quarterly Rabobank Rural Confidence Survey has found.

Released on September 3, the survey found just more than half of Victorian farmers surveyed (51 per cent) expect business conditions to worsen in the coming 12 months, more than double the 24 per cent with that expectation in the previous survey in June.

And 92 per cent of those with a negative view blamed their outlook on drought, with grain growers the most anxious about seasonal conditions.

Rabobank’s southern Victoria and Tasmania regional manager Hamish McAlpin said despite the overall drop-off in confidence, Victoria was a state ‘‘divided’’, with dry conditions spreading across the north and east, but shaping up for a good spring elsewhere.

And despite the disparity in seasonal conditions, farm businesses across the state were continuing to report strong viability levels, he said.

‘‘Viability is at levels much higher than in past dry periods, with 95 per cent of surveyed farming businesses reporting viability,’’ Mr McAlpin said.

Completed last month, the latest survey found the number of Victorian farmers with an optimistic outlook for the agricultural economy in the coming 12 months fell back to 14 per cent (from 22 per cent last survey), while 31 per cent expect similar conditions to last year (compared with 50 per cent previously).

By commodity, grain grower sentiment took the biggest hit, with 72 per cent of surveyed grain producers in the state expecting agricultural business conditions to worsen, compared with just 19 per cent in June.

It was a similar story for the state’s graziers, with 65 per cent of beef producers (up from 49 per cent) and 41 per cent of sheep producers (up from 14 per cent) reporting a negative outlook on the coming 12 months.

That said, 51 per cent of surveyed sheep graziers expected similar conditions to last year, which was characterised by strong wool and lamb prices, Mr McAlpin said.

‘‘Sheep and cattle in the right condition are still fetching good money and the expectation is those that ‘get a spring’ will be able to capitalise on the market for some great returns,’’ he said.

But Mr McAlpin said the real standout was lambs, which were making more than $8/kg.

The survey also saw a drop-off in dairy farmer confidence, with 47 per cent of Victorian dairy producers now expecting business conditions to worsen, more than double the 21 per cent with that view last quarter.

Despite the drop-off in overall rural confidence, farmers’ expectations for their farm incomes didn’t fall to the same degree.

The survey found 22 per cent of Victorian farmers were expecting higher gross farm incomes in the next 12 months and a further 35 per cent were anticipating incomes to be on par with the previous year.