Western Australian farmers are more confident, with 24 per cent expecting improvements in the next 12 months, according to the latest results of the Rabobank Rural Confidence Survey.
Western Australian farmers are more confident, with 24 per cent expecting improvements in the next 12 months, according to the latest results of the Rabobank Rural Confidence Survey.
The national average was 15 per cent.
The full text of a Rabobank announcement is pasted below
Western Australian farmer confidence has improved after touching record lows in the last survey period, according to the latest results of the Rabobank Rural Confidence Survey.
A total of 24 per cent of WA primary producers expect the agricultural economy to improve in the next 12 months, up from only seven per cent who had expected an improvement last quarter. The number expecting conditions to deteriorate in the next 12 months fell to 54 per cent, down from 73 per cent last quarter.
Rabobank state manager for WA, Crawford Taylor said the improvement in confidence observed this quarter comes off a very low base and suggests that WA farmers are putting a tough 2006 behind them and are looking ahead to 2007.
"Many areas of the state experienced record dry conditions through the winter, which sent confidence plummeting. Rainfall in parts of the state since then has restored some confidence," Mr Taylor said.
"With the buoyant grain prices, farmers who are in a position to harvest an average crop should receive good returns. However, conditions remain poor in much of the state. In the Northern agricultural area, many producers will not harvest a crop," Mr Taylor said.
The fall in sheep prices has also had a big impact on confidence as many farmers try to reduce livestock numbers to survive the drought conditions.
"Many farmers have de-stocked in response to limited pasture availability and the likely increased costs of supplementary feeding this summer and autumn. The story for cattle is similar. Increased supply as a result of the short spring and bottlenecks occurring in the processing sector have significantly contributed to falling cattle prices," Mr Taylor said.
Of the farmers in WA expecting the agricultural economy to worsen in the next 12 months, 78 per cent cited seasonal conditions as a major reason, compared with 89 per cent with that concern last quarter and just five per cent the preceding quarter.
Input costs also continue to impact on farm confidence with 24 per cent of respondents citing them as a concern, compared to 22 per cent last quarter. Concern over the direction of commodity prices has also increased with 20 per cent citing them as a reason for declining economic conditions compared to just five per cent last quarter.
Mr Taylor said confidence had improved among all farm types but still remains weak, reflecting the poor conditions across much of the agricultural area.
"On a more positive note, the recent rally in wool prices should help to restore some confidence in the sector," Mr Taylor said.
Despite concerns over the current year's seasonal conditions and input costs, WA farmers' income expectations have also improved consistent with the improvement in headline confidence. A total of 31 per cent of respondents expected higher gross farm incomes over the next 12 months, up from just 10 per cent last quarter. And fewer expected lower gross farm incomes - 39 per cent compared to 69 per cent last quarter.
Investment intentions have also improved coming off the record lows observed last quarter. A total of 19 per cent of farm businesses expected higher farm business investment over the next 12 months, up from 12 per cent in the previous quarter. A total of 23 per cent of respondents expected lower investment, compared to 39 per cent with that expectation in the previous survey.
The Rabobank Rural Confidence Survey is a quarterly monitor of outlook and sentiment in Australian rural industries. The only study of its type in Australia, it is conducted by an independent research organisation interviewing a panel of more than 2000 farmers throughout the country. The next results will be released in March 2007.
