The latest Rabobank Rural Confidence Survey in Australia recorded the highest confidence levels in a fourth quarter since the survey started in 2000.
A promising spring in Eastern agricultural regions kept farmer confidence high, but both wet and dry weather are now causing concern.
For farmers on the Eastern seaboard, continuing wet weather is becoming too much of a good thing, while in Western Australia farmers are struggling with near-drought conditions.
A comprehensive monitoring of outlook and sentiment in Australian rural industries, the Rabobank Rural Confidence Survey questions approximately 1200 farmers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis.
Results at a glance
Farmer sentiment was buoyant, driven by consistent early spring rainfall across the major Eastern agricultural regions and strong commodity prices
The strong Australian dollar, and unfavourable seasonal conditions in some regions, had the biggest negative influence on confidence
Confidence was highest among grain, sheep and cotton producers, all sectors experiencing firm prices.
The expectation of favourable seasonal conditions was the main driver behind farmer confidence this quarter, according to Rabobank’s General Manager Rural Australia Peter Knoblanche.
Of those primary producers who expected conditions to improve over the next 12 months, 70 per cent nominated seasonal conditions as a major contributing factor. Rising commodity prices were also top of mind, quoted by 30 per cent of respondents overall.
Rain and drought impacting crops
Rainfall was favourable in many key agricultural regions in the East and South for much of the spring “But the picture has changed in many parts of the Eastern states in recent weeks,” Knoblanche said.
“Continuing persistent rains are causing harvesting delays, crop losses and are impacting quality and yield. And in Western Australia near-drought conditions, particularly in the wheat belt, could see the state’s lowest crop in 30 years.”
Positive sentiment across all sectors
Sentiment had remained positive across all sectors at the time of the survey in early November.
Confidence remained stable amongst lamb and cattle producers. Sugar producers recorded a further recovery in sentiment despite facing harvest issues.
Dairy farmers were slightly less confident than in the previous survey but confidence was still buoyant.
“Key production regions can look forward to a strong milk price through the 2010/11 season and, with the advantage of good conditions on farm, a profitable year for most,” Knoblanche said.
Expectations for 2011
The Australian Rural Confidence Index remained positive for the fourth successive survey, with more farmers expecting economic conditions to improve than those expecting conditions to decline.
The latest survey found 42% of farmers expected conditions to improve in the coming year, up from 37% in the previous quarter. The number of farmers expecting conditions to worsen also increased however, up to 19%, from 13% in the previous survey.
The Rabobank Rural Confidence Survey has been conducted since 2000 by an independent research organisation interviewing an average of 1200 farmers throughout the country each quarter. The next results are scheduled for release in March 2011.