Australian farmers' confidence drops with falling prices

Confidence among farmers in Australia declined as a result of falling prices of certain commodities.

 

Despite the fall in confidence, favourable rural conditions had boosted optimism among farmers in the eastern states, Rabobank said.

 

The Rabobank survey, which covered some 2,000 farmers, found that 29% expected conditions to improve in the coming year, down from 30% in the preceding quarter. The proportion of farmers expecting conditions to worsen increased to 23% from 19%.

 

Rabobank said favourable rainfall had resulted in the best winter crop planting conditions in nearly a decade in many regions but that this was offset by depressed grain prices and a locust plague. Most farmers delayed planting until the plague subsided but caution needs to be exercised in Spring when eggs hatch, it added.

 

Australian farmers would benefit from the recent fall in the value of the Australian dollar, Rabobank said, which would boost commodity prices in Australian dollar terms. However, grain prices are expected to remain subdued.

 

Rural confidence was highest in the dairy sector. On the other hand, sentiment was negative in wheat, grain and sugar sectors. Region-wise, confidence was strongest in Victoria, New South Wales and Tasmania, the survey found.