Confidence levels of Australian agribusinesses increased in the first quarter of 2019, despite persistently challenging conditions across much of the country.
This was particularly the case for wool, mixed cropping, livestock, lamb and mutton producers, while dairy farmers continued to struggle due to seasonal conditions and high input costs.
That’s according to National Australia Bank’s second Agribusiness Banker Survey, which reveals that national agribusiness confidence rose by 20 index points across the first three months of the year, on the back of improved seasonal conditions in Queensland and continued positivity in Western Australia following a bumper summer harvest.
NAB agribusiness customer executive Neil Findlay said that while confidence rose in all states except NSW and Victoria, key indicators of business conditions remained negative.
‘‘Profitability and employment both weakened in quarter one 2019, while trading conditions improved slightly,’’ Mr Findlay said.
‘‘Seasonal conditions remain a key driver of the survey results, with the impact of prolonged drought in NSW clearly impacting conditions there.’’
On an industry basis, conditions were strongest in wool, fisheries and horticulture, and weakest in dairy with high input costs continuing to pose challenges for producers.
In terms of industry performance, NAB agribusiness bankers identified that their strongest performing customers were wool, mixed cropping, livestock, lamb and mutton producers.
‘‘The strong run of wool prices and strength in the sheep meat market have helped producers in those sectors,’’ Mr Findlay said.
‘‘Dairy remains one of the weakest performers, but we are optimistic that improved export milk prices may boost confidence and conditions in the dairy sector this year.’’
The survey reveals one in five NAB agribusiness bankers saw weather conditions as having the largest bearing on customer confidence, while other key issues included government policy and regulation, margin pressure and interest rates.