A quarter of Australian farmers plan to increase their investments in property and expand this year.
The latest Rabobank Rural Confidence Survey of farmers shows the greatest confidence is among cotton and grain growers, while least confidence is among dairy and sugar producers.
Good summer rainfall has driven much of the increase in confidence and commodity prices also underpin the strong outlook.
“Investment intentions are at a four year high,” said Peter Knoblanche, the deputy chief executive of Rabobank Australia.
In summary, the survey of 1000 farmers across commodities in all states and territories found;
- 28 per cent are looking at on farm investment, like fences, livestock, yards and silos
- 27 per cent of the farmers who will spend more, will buy more property, particularly cotton and grain growers
- Dairy lags behind in confidence, with global dairy prices stagnant at best
- Sugar farmers have the least confidence in the price outlook this year
- 95 per cent see their farms as viable.
“It’s good to see the viability perspective really comes through,” Mr Knoblanche said about farmers’ attitudes to their own future.
“The viability indicator reached its highest level in 14 years, 95 per cent of farmers view their business as having long-term viability.
Differences between the states
Farmers confidence is higher in every state except Western Australia, where it is steady.
In NSW, producers are the most upbeat, followed by Victoria, which posted the biggest upswing in confidence after good rainfall.
Confidence in Western and South Australia is dependent on rain in the coming weeks, the report states, as farmers wait to sow winter crops.
Sugar prices lifted by around US15 cents a pound in 2015 but Rabobank’s Todd Charteris said the sugar price was “sitting well-below the five-year average”.
Despite tighter water supplies in irrigated areas, the irrigated cotton sector showed strong sentiment, the best for almost three years.
“Cotton growers who locked in prices earlier in the season will be somewhat shielded by the recent drop in prices, however the price decline is not thought to be a structural downward adjustment, with prices expected to improve throughout 2016,” Mr Charteris said.
Source – ABC