Australian farmers’ confidence is still sky high as primary producers continue the fightback from drought amid strong commodity prices.
Rabobank’s latest quarterly rural confidence survey released on Monday shows ongoing optimism among producers who have rebounded from a crippling dry spell.
While overall confidence has eased slightly since December, farmer sentiment remains at one of its highest levels in the survey’s 20-year history.
One in four farmers expects conditions in the agricultural economy to improve in the coming year, while 51 per cent expect stability.
Just seven per cent of farmers have a pessimistic outlook for the year ahead with widespread optimism across all sectors.
Rising commodity prices and strong demand were driving confidence, with 68 per cent of respondents who said conditions would improve citing those factors.
Consistent summer rain and mild temperatures in many regions have also combined to keep confidence high with seasonal conditions nominated by 62 per cent.
Dry conditions were the main concerns for farmers expecting the agricultural economy to deteriorate this year, with people in parts of Western Australia and Queensland most worried.
Rabobank Australia CEO Peter Knoblanche said the prospect of another good year was underpinning solid, long-term confidence in the sector.
“The recovery from drought and the return to production over the past 12 months has been extraordinary, despite the uncertainties around COVID-19,” he said on Monday.
There are promising early signs for grain farmers who are planning this year’s crop after a near-record winter harvest last season.
Livestock prices are also breaking records with the demand for sheep and cattle outstripping supply.
Mr Knoblanche said that was challenging for farmers trying to rebuild herd and flock numbers after the drought, but providing good returns for those who held on to stock.
“This year it seems all the fundamentals are lining up,” he said.
“We’ve had near-perfect seasonal conditions over summer for much of the country and commodity prices are very solid.
“Combined with low interest rates and a number of government incentives, farmers are generally speaking in a good place right now.”
NSW recorded the highest rural sentiment followed by Victoria, while grain and cotton farmers are the most optimistic.
The survey, which questions about 1000 primary producers across a range of commodities and geographical areas, found strong results for income forecasts and investment intention for the upcoming year.