According to the latest quarterly Rabobank Rural Confidence Survey, Australian farmers are increasingly optimistic about the outlook for agriculture with winter rainfall and firm commodity prices fuelling sentiment. In fact, Australian rural confidence is now at a two and a half-year high.
The survey, completed earlier this month, found 37% of farmers expected conditions to improve in the coming year, up from 29% in the previous quarter. The number of farmers expecting conditions to worsen decreased to 13%, down from 23% last survey.
The Rabobank Rural Confidence Survey questions approximately 1300 farmers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis.
Rabobank general manager Rural Australia Peter Knoblanche said the latest survey had seen a general lift in farmer confidence as a result of consistent winter rains, particularly in the eastern states, with the biggest increases among those sectors also enjoying strong commodity prices, such as grain and dairy.
“Good late autumn and winter rainfall which fell across New South Wales, Victoria, Tasmania and parts of South Australia, Queensland, and southern Western Australia provided a real boost for farmers in these areas. In many regions, rain came at an ideal time for the planting of grain, while follow-up falls have helped to sustain crops,” he said.
“The most remarkable aspect of the falls through winter has been the consistency of rain in many areas. Most producers have come to expect a mid-season lull and have become resigned to waiting anxiously for finishing rain toward the end of the season. This winter, the steadiness and wide dispersion of rain has positively impacted large swathes of the eastern states, particularly in the south. Additionally, the rain has been substantial enough to significantly improve storage levels in some major dams, to the delight of irrigators.”
The latest Rabobank Rural Confidence Survey showed the expectation of favourable seasonal conditions was the main driver behind increased farmer confidence this quarter. Of those primary producers who expected conditions to improve over the next 12 months, 53% nominated seasonal conditions as a major contributing factor, while rising commodity prices were also top of mind, cited by 59% of grain producers and 46% of respondents overall.
Mr Knoblanche said the survey observed the biggest increase in confidence among grain producers.
The Rabobank Rural Confidence Survey has been conducted since 2000 by an independent research organisation interviewing an average of 1300 farmers throughout the country each quarter. The next results are scheduled for release in November 2010.