Rising commodity prices and strong seasonal conditions have helped to push rural confidence back into positive territory for the first time in almost two years.
The latest quarterly Rabobank survey of 1000 producers found farmers are optimistic for the first time since June 2022.
“Most farmers emerged relatively unscathed from what they anticipated to be pretty dire conditions through summer as significant rainfall was received across many farming regions,” Rabobank’s Marcel van Doremaele said.
Almost a third of the nation’s farmers expect the agricultural economy to improve over the next year, that’s more than double the number of the last survey.
The confidence gauge also showed a significant drop in the number of producers who expect conditions will worsen – down to 16 per cent from 55 per cent.
Rising commodity prices topped the list of reasons Aussie producers gave for their positive outlook.
“Although agricultural commodity prices remain well below the highs we saw in 2022, the outlook is more positive for this year,” Mr van Doremaele said.
And he said better than expected summer conditions was another key confidence driver, with 40 per cent of those surveyed expecting a brighter year ahead.
“This – along with expectation of positive farm margins for the year ahead – has driven the most significant turnaround in confidence we’ve seen in several years,” he said.
The turnaround followed two years where rural sentiment had “languished in negative territory” corresponding to falls in the red meat markets, higher interest rates and rising input costs.
Uncertainty about the declared return to El Nino conditions also saw sentiment among producers stagnate at low levels in late 2023.
Victorian farmer confidence rose to the highest level nationally, with sheep producers the most optimistic of the state’s farmers this quarter.
NSW delivered the largest jump in confidence thanks to good summer rainfall in many areas while Tasmania and Western Australia were the only two states where confidence remained at negative levels.
This post was originally published on Michael West.
