Agriculture’s bullish mood still charging despite dry weather worries

WELCOME RAIN: Autumn rain delivered an ideal cropping season start in Victoria and southern NSW. But other parts of the country needed rain, said Rabobank's national country manager, Todd Charteris.
WELCOME RAIN: Autumn rain delivered an ideal cropping season start in Victoria and southern NSW. But other parts of the country needed rain, said Rabobank's national country manager, Todd Charteris.

IT’S not raining where it’s badly needed, but farmers across much of Australia are more optimistic about their industry’s outlook than they have been for at least two years.

Most of that optimism was still riding on the back of positive sentiment sweeping the sheep and beef sectors, where historically high prices for sheepmeat, wool and beef continued to reward livestock producers with healthy cash flows. 

Rabobank’s latest rural confidence survey also pointed to a much better mood among dairy farmers and an upbeat cotton market was helping underpin remarkably bullish expectations.

Notably, 28 per cent of farmers believe the rural economy would improve further in 2017-18 while almost two-thirds expect conditions would remain stable in the year ahead.

Cereal prices near 10-year lows were compounding grain sector unease.

Solid prices have been the main driver of sentiment in the sheep and beef sectors. 

“There has rarely been a better time to be a grazier,” Rabobank’s national country banking manager Todd Charteris said.

“Beef, lamb and mutton continue to hit new records, and wool prices also at historical highs – albeit back from recent peaks.”

In fact, the 77 per cent of the 1000 farmers surveyed who felt conditions should improve cited climbing commodity prices as reason for their positive outlook.

Rabobank said confidence was strongest in Victoria, Tasmania and NSW, largely due to the market outlook for graziers, and “a flying start” to the cropping season.

The national picture of more farmers feeling positive rather than negative continues a trend started in early 2015.

It is now the longest run of positive sentiment in the 17-year history of the Rabobank confidence survey. 

Those with a pessimistic view of the coming year stood at just 10 per cent.

Mr Charteris said widespread autumn rainfall had seen an ideal cropping season start in Victoria.

National Farmers Federation competitiveness committee chairman Dan Cooper said the mood among many farmers still reflected the relief which accompanied last season’s surprise 59 million tonne winter grain crop and excellent pasture growth.

Expectations of a correction in surging livestock markets, particularly prime lambs, were also not far from most farmers’ minds. 

“We have people who normally sell lambs now in the market as buyers –  a correction seems pretty likely to follow at some point,” he said.

While confidence in the national agribusiness sector was up, individual farmers were slightly less optimistic about their own gross farm incomes in 2017-18. 

About 31 per cent felt their farm incomes may rise, but almost half expected little change and 19 per cent tipped a fall.