The latest quarterly Rabobank Rural Confidence Survey, released on March 26, found confidence in Australia’s agricultural sector had increased — with more farmers expecting improved conditions in the agricultural economy rather than decline in the coming 12 months.
Despite ongoing dry conditions across parts of southern Australia, seasonal optimism combined with market stability have supported increased positivity in the sector.
The survey found net national rural confidence to now be sitting at five per cent, up from -9 per cent in the December quarter.
About a quarter of Australian farmers, 24 per cent, were anticipating conditions in the agricultural economy to improve in the coming year, up from 18 per cent with that view last survey.
While fewer expected economic conditions to worsen, 19 per cent, around half the nation’s farmers, 51 per cent, are expecting little or no change.
Rabobank group executive for Country Banking Australia Marcel van Doremaele said the heightened optimism seen in the sector was grounded in a combination of seasonal and market improvements.
Expectations of positive seasonal conditions were cited by 42 per cent of respondents as a reason for positivity, up from 34 per cent in the December survey.
Forty-five per cent of the country’s producers were also aware that drought could be a detrimental factor for the agricultural economy.
“This first quarter survey acts as somewhat of a pulse-check for farmers. Sentiment at this time of year – especially in southern states – is pinned on hopes for good, early opening rains to kickstart the winter cropping program,” Mr van Doremaele said.
“With sub-soil moisture depleted after prolonged dry weather in parts of southern Australia in 2024, farmers in these regions are paying close attention to the rainfall outlook and hoping for a substantial autumn break to set up crops and bridge the feed gap, followed by better seasonal conditions throughout 2025.”
Indications of commodity price stability were also shown to be contributing to the increasingly optimistic outlook among agricultural producers.
Commodity prices were nominated as cause for optimism by 29 per cent of farmers surveyed.
Although beef producers were found to be the most confident sector overall, dairy and grain producers were most hopeful for improved commodity prices.
“Prices of most commodities are not expected to reach the highs or lows seen over the past three years,” Mr van Doremaele said.
“Instead, Rabobank expects beef and lamb producers to face stabilised markets, with some upside.
“The dairy industry is also looking forward to a solid year with improved farm gate milk prices.”
Overseas markets/economics were also cited as a positive factor by 26 per cent of farmers surveyed, up from 15 per cent last survey.
Government intervention/policies and input prices remained the primary concerns voiced in the survey – by 27 per cent and 25 per cent of respondents, respectively.
Worry about government intervention/policies was particularly high in WA, where sheep producers will be directly impacted by the coming end of live sheep export. Here 39 per cent of producers nominated government intervention/policies as cause for pessimism.
Concerns about the cost of doing business also eased somewhat for farmers this quarter, lower interest rates as one of the reasons for their optimism.
