(Australian Associated Press)
Confidence among farmers has fallen after the dry start to autumn and the cut to the price that dairy farmers receive for their milk.
Releasing its latest quarterly survey of rural confidence, food and agribusiness bank Rabobank says farmer confidence was high at the start of 2016 but has since declined.
Much of the downturn in confidence was felt among dairy, cotton and grain producers.
Seasonal concerns were behind the drop in confidence among cotton and grain growers.
Farmers across many parts of Australia were worried about the lack of rain at the start of autumn, but recent falls in southeast Australia have provided some relief.
“After very little rain to speak of since January, farmers were grappling with dry conditions until the rains fell in early May,” Rabobank’s manager of country banking in Australia, Todd Charteris, said.
“This has spurred winter crop plantings across the southeast of the country, with farmers now able to fulfil their planting intentions.”
Rabobank said cuts to the farmgate milk price by major dairy producers Murray Goulburn and Fonterra had created significant cashflow problems for many dairy farmers, sending them reeling.
“At the time of the survey, sentiment in dairy was already low due to the global market downturn and dry seasonal conditions in many dairying areas,” Mr Charteris said.
“But since then, these concerns have been eclipsed by the recent cut in milk prices.”
The Rabobank survey, which was completed in April, found that fewer farmers were optimistic about the coming 12 months.
Twenty-eight per cent expected the agricultural economy to improve – down from 34 per cent who held that view in the prior survey.
Those farmers expecting conditions to worsen rose to 19 per cent, from 11 per cent.
Nonetheless, more farmers had a positive outlook rather than a negative one.
One in five farmers expects to expand their business by acquiring land over the next five years.
But farmers’ income expectations were lower, with the biggest downward revision in the cotton sector.
Income expectations were also down among dairy farmers, and are expected to fall further in the next Rabobank survey.
In most states, confidence fell from the highs earlier in the year, especially in drought-stricken Queensland.
But confidence among farmers rose strongly in Western Australia following widespread rain.
Confidence according to sector was highest amongst beef and sugar producers, and lowest in the dairy sector.
The Rabobank survey questions an average of 1,000 farmers across Australia every three months.