The latest Rabobank Rural Confidence Survey has found that farmer confidence is at its lowest levels recorded since the depths of the millennium drought in 2006.
The third quarter survey found 56 per cent of the nation’s farmers now expect conditions in the agricultural economy to deteriorate in the coming 12 months, significantly more than the 35 per cent with that expectation in the June quarter.
Those expecting an improvement in conditions declined to 13 per cent, from 18 per cent in the June quarter. Twenty-five per cent expected similar conditions to last year.
It was a different story in Western Australia, with 48 per cent of the state’s farmers expecting an increase in gross farm income, dues to strong commodity prices for grain.
However, the rising price of grain and need to import it from interstate could hit dairy farmers hard.
“Dairy farmers and graziers have already made tough decisions around their feeding regimes during winter, but they will be faced with harder decisions if they don’t get a spring break given the cost and availability of feed,” says Peter Knoblanche, Rabobank Australia CEO.
Despite heightened drought concerns, Peter says longer-term business outlook remains positive, with 93 per cent of surveyed farming businesses reporting viability – well up on the levels reported through much of the millennium drought.
The next Rabobank Rural Confidence Survey will be released in December 2018.