Western Australian farmers are less certain, but remain cautiously optimistic about the agricultural economy for the next 12 months, according to the Rabobank rural confidence survey taken between mid-April and mid-May.
Western Australian farmers are less certain, but remain cautiously optimistic about the agricultural economy for the next 12 months, according to the Rabobank rural confidence survey taken between mid-April and mid-May.
Of the WA farmers surveyed, 33 per cent expected the agricultural economy to improve over the next 12 months, down from 43 per cent last quarter.
Balancing this result somewhat, the number expecting conditions to deteriorate in the next 12 months also fell, dropping to 22 per cent, down from 27 per cent in the last quarter.
Nationally, farmers were much less confident, with 31 per cent of farmers expecting an improvement, down from 45 per cent, and 37 per cent expected things to worsen, up from 20 per cent last quarter.
Rabobank state manager Crawford Taylor said, despite the slight decline in confidence, the result was a strong indication that WA farmers were looking forward to a better 2007.
The general feeling is still one of cautious optimism for the coming season, with most growers positive regarding grain, livestock and wool markets, however, there are still concerns in the WA dairy sector regarding the impact of higher feed costs," he said.
Of the farmers in WA expecting the agricultural economy to decline over the next 12 months, 40 per cent gave seasonal conditions as a major reason, whilst increasing input prices were also "top of mind," cited by 27 per cent of respondents.
Seasonal conditions were of a higher concern nationally, with 79 per cent of farmers nominating them as a major contributing factor, along with increasing input prices, cited by 21 per cent.
The survey also found that WA farmers' income expectations had decreased, with 41 per cent expecting a higher gross income, down from 46 per cent in the previous quarter. A similar result occured nationally, with 32 per cent expecting a higher income, dcompared with 39 per cent in the previous survey.
The full text of the WA specific announcement is pasted below
The most recent Rabobank Rural Confidence Survey - taken between mid-April and mid-May this year - found that 33 per cent of primary producers in Western Australia expect the agricultural economy to improve over the next 12 months, down from 43 per cent last quarter. Balancing this result somewhat, the number expecting conditions to deteriorate in the next 12 months also fell, dropping to 22 per cent, down from 27 per cent last quarter.
The quarterly Rabobank monitor surveys an average of 2000 primary producers each quarter, with the sample representing a wide range of commodities and geographical areas throughout Australia.
Rabobank state manager for Western Australia Crawford Taylor said, despite the slight decline in confidence observed this quarter, the second consecutive positive result for the state is a strong indication that WA farmers are putting a tough 2006 behind them and looking ahead to a better 2007.
"Confidence was well down in 2006 due to record dry conditions across most of the state," Mr Taylor said. "Concerns over the season break, or minimal rainfall, extend across the majority of the agricultural area, apart from the south east, which when compounded by concerns over input costs, contributed to a decline in headline confidence."
"The general feeling is still one of cautious optimism for the coming season, with most growers positive regarding grain, livestock and wool markets, however, there are still concerns in the WA dairy sector regarding the impact of higher feed costs," Mr Taylor said, adding that increased fertiliser prices were also affecting confidence but, on balance, favourable markets for most commodities had buoyed sentiment in much of the state.
According to Rabobank's Food & Agribusiness Research division, rural commodity prices in Australian dollar terms have eased to their lowest level since January 2006, weighed down by an Australian dollar that has reached fifteen year highs against the US dollar in the past month. Adding to the downtrend, global prices for cotton and sugar have continued to weaken, although these losses have been mostly offset by further price gains for the dairy, wheat and beef sectors. Australian commodity prices in US dollar terms have declined marginally in recent months and are now just below recent historical highs.
Of the farmers in WA expecting the agricultural economy to decline over the next 12 months, 40 per cent gave seasonal conditions as a major reason, whilst increasing input prices were also "top of mind," cited by 27 per cent of respondents.
Consistent with the decrease in headline confidence, WA farmer income expectations also eased in the last survey period. Overall 41 per cent of respondents expect their gross farm income to improve in the next 12 months, down from last quarter when 46 per cent anticipated higher incomes. Similarly, farmers' investment intentions - an important indicator which reflects farmer spending in rural and regional communities - also eased slightly in the last survey period with 26 per cent of primary producers expecting to increase investment in their farm businesses in the next 12 months, down from 28 per cent in the last quarter.
The quarterly Rabobank Rural Confidence Survey is a definitive monitor of outlook and sentiment in Australian rural industries. The most robust study of its type in Australia, the survey has been conducted since 2000 by an independent research organisation interviewing an average of 2000 farmers throughout the country each quarter. The next results will be released in August 2007.
