Farmers are happy at the moment, with rain playing a bigger part in their sentiment than the federal budget. The quarterly Rabobank Rural Confidence Survey for May reports a big leap in confidence to levels last seen in 2011.
While drought remains a problem further north, good autumn rains in key cropping regions and southern grazing areas can take the credit for the boost.
The May survey reports a strong lift in overall confidence levels led by the improved outlook for beef and sheep, as well as grains. Dairy farmers are the most upbeat about the year ahead. Investment intentions also strengthened.
Overall, 40% of farmers expect conditions in agriculture to improve (up from 29%), while 44% expect no change. The number believing conditions will worsen nearly halved to 15 per cent 27 per cent. The outlook on individual farm profitability also aligns with those figures.
Seasonal conditions drove sentiment this quarter, with 60% citing the season as reason for their optimism – up from 43%. The outlook for overseas markets and commodity prices was also front-of-mind for many, nominated by 47% and 43% respectively.
Rabobank group executive for Country Banking Australia, Peter Knoblanche, said the strong rally wasn’t surprising.
“The rains couldn’t have come at a better time. Graziers in many parts of Australia also have had more reason to smile, with the markets responding in March and April to the improved climatic conditions,” he said.
Queensland wasn’t so lucky with three-quarters of the state still drought-declared and north-west and western areas of NSW suffering a similar fate.
Sentiment lifted across all states, with confidence rallying to three-year highs in Victoria, NSW, South Australia and Queensland, although the sunshine state has the weakest sentiment.
“Victoria has now tallied up seven consecutive quarters of the highest sentiment across the country,” Mr Knoblanche said.
And in good news for the future of farming, the survey found that 61% of respondents looking at bringing the next generation into the business, either through family transfer of the farm or shared ownership.
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