Beef producers are the most bullish of Australian farmers when it comes to their prospects for the next 12 months, according to the latest Rabobank Rural Confidence Survey.
The survey, released on Tuesday, found beef producers across Australia had a net confidence of 22%, up from 19% in the previous survey.
Rabobank group executive for Country Banking Australia Marcel van Doremaele cited seasonal conditions and commodity prices as key positive drivers for this sector.
“Cattle producers are watching as prices continue to climb, led by cull cow prices
supported by US demand for lean trim and the anticipation this demand could increase
with the additional US tariffs imposed on Brazil,” Mr van Doremaele said.
"This would provide ongoing support for Australian cattle prices, underpinning our beef industry’s confidence and investment intentions."
Confidence among sheep producers also strengthened to 14%. This was a massive rise from -2% in February and driven by robust lamb prices with 65% nominating this as a
reason for optimism.
“Sheep producers are buoyed by commodity price strength which has balanced out the
wide variation in seasonal conditions experienced across the country, and there’s an
expectation of improved income for the year ahead,” Mr van Doremaele said.
Grain grower sentiment, however, declined sharply this quarter, with a net confidence of
24% reported for the sector, down from -6% previously. Only 16% of
grain growers expect conditions to improve, compared with 39% who anticipate
worsening conditions.
The overall result of the survey of 700 primary producers across a wide range of commodities and geographical areas, found that sentiment in Australia's agricultural sector cooled over the winter months.
It found net farm sector confidence has eased to a neutral reading of zero, down from 5% in the previous survey.
This means the same number of farmers (29%) now expect conditions in the
agricultural economy to improve over the next 12 months as those who anticipate
conditions to weaken. A total of 39% of farmers expect conditions will stay the same in the year
ahead.
Farmers reported feeling most positive about seasonal conditions and commodity
prices, although producers in Victoria and South Australia in particular remained
concerned about weather.
High input costs, as well as concerns about government policies and intervention,
were the main causes for pessimism.
Despite mixed confidence levels, 86% of Australian farmers still plan to increase or
maintain investment, albeit slightly down from 89% last survey.
The key area of investment remains in developing farming enterprises, with 63% of
Australian farmers surveyed earmarking funds for new fences, yards and silos. There is
also strong and stable interest in spending on new technologies (for 37%) and new
plant/machinery (for 32%).
One in five farmers are also investing in their own professional development, with 20%
earmarking education as a focus for investment in the next 12 months.
Appetite for land purchase softened slightly this quarter, with 13% of respondents
intending to purchase more land (was 14% last quarter) – with demand highest in
Tasmania (20%) and the cotton industry (24%).