Western Australian farmers are increasingly confident about their outlook and may enjoy their best profits in a decade after the scale of the state's grain harvest was upgraded to near record levels.
Western Australian farmers are increasingly confident about their outlook and may enjoy their best profits in a decade after the scale of the state's grain harvest was upgraded to near record levels.
On Friday, grain handler CBH Group revised its harvest estimate upwards to 14.5 million tonnes from the previous estimate of 13.2mt-13.8mt.
Farm finance specialist Rabobank believes the harvest could be even larger.
With the WA harvest more than 95 per cent complete, Rabobank believes the state's grain production "will push up toward 15 million tonnes".
This would surpass the 2003-04 harvest record of 14.7mt delivered to CBH.
Rabobank acting state manager Stephen Kelly said that “some farmers are saying this is a once-in-a-lifetime season for their business from an income perspective’’.
“We are most likely witnessing the equal largest crop on record, and wheat cash prices have held around the $300/tonne mark, which is slightly above the price used in most budgets completed at the start of the year,” he said.
Livestock producers have also benefited, with good spring pasture growth in most regions allowing producers to hold onto stock they otherwise might have sold.
These results have fed through to a lift in farm confidence in Rabobank's quarterly survey, which questions an average of 1,000 producers throughout Australia across a wide range of commodity and geographical issues.
It found that the rural sector has rebounded from a net -9 per cent (negative) confidence last quarter, to a net 13 per cent positive outlook, with grain growers and livestock producers enjoying the most favourable conditions.
A total of 27 per cent of the state’s farmers expect agricultural conditions to improve in the next 12 months, while 57 per cent expect them to remain stable.
Only 13 per cent of farmers have a negative outlook.
Rabobank believes that the upswing has been driven by positivity among grain growers, with the state overall looking at a “magnificent harvest”.
“This is such a significant story for agriculture in this state,” Mr Kelly said.
The survey showed that 43 per cent of farmers in WA with a positive outlook cited seasonal conditions as the main driver of their improved confidence – the majority from the Central Wheatbelt - followed by 23 per cent saying commodity prices drove their optimism.
Investment intentions also improved, with 30 per cent expecting to increase investment in their farms, up from 11 per cent in the previous quarter, and 58 per cent looking to maintain current levels.
Together with an overall lift in farmer confidence in the state, farmers’ expectations of their own businesses also rose, with 35 per cent expecting business performance to improve in the coming 12 months, 53 per cent believing business will remain stable, and just 6 per cent believing business will worsen.
Mr Kelly said the good season meant WA farmers overall would likely enjoy their best profits in a decade.
“This has been amplified by the fact farmers had generally kept their costs down this year, with many effectively ‘closing their cheque books’ earlier in the season when things did not look like they would shape up well,” he said.
