Australia’s agriculture sector sees farmer confidence drop in last quarter

The ‘rise and rise’ in input costs and the fallout from the war in Ukraine are weighing on confidence in Australia’s agricultural sector, with farmer confidence declining in the last quarter.

The results of Rabobank’s second quarter rural confidence survey, released today, reveal optimism about high agricultural commodity prices and the prospect of a third consecutive bumper grain harvest has been dampened by rising the cost of vital agricultural inputs such as fertiliser, fuel, freight and machinery and wider inflationary pressures in the Australian economy.

In addition, the latest survey reveals that 50% of Australian farmers believe the ongoing conflict between Russia and Ukraine will have a negative impact on agricultural businesses, while 25% expect the effect to be positive. .

Although the farm income projections for the next 12 months remain stable, the number of farmers looking to increase their investments decreased slightly this quarter. The latest survey, completed last month, found that 28% of Australian farmers now expect trading conditions to improve over the next 12 months (down slightly from 31% with this view in the previous quarter), while 16% anticipate deterioration. (against 14% previously). More than half (53%) expect economic conditions to remain stable over the coming year.

This marks three consecutive quarterly declines in net rural confidence and brings farmer sentiment back to levels last seen in June 2020, following the first pandemic lockdown. Confidence is highest in the cotton and grain sectors, but also very strong among dairy farmers, with high prices combined with excellent seasonal conditions providing an ideal backdrop for all three industries.

Click here to read the report.

For more information:
Denis Shaw
Rabobank Australia and New Zealand
Tel: 02 8115 2744 or 0439 603 525
[email protected]

Lana T. Arthur