Farmers ‘press pause’ on expectations for 2023

In the aftermath of extended rainfall, punctuated by significant flooding, Victorian farmer confidence has stabilised as many take a ‘wait and see’ approach to the flow-on effects of the wet spring.

The latest Rabobank Rural Confidence Survey, released on 14 December, found farmer sentiment across Victoria has broadly held steady over the recent quarter, after tracking downwards over most of the past year.

On a state-wide level, slightly fewer farmers expected business conditions to improve in the 12 months ahead (12 per cent, down from 14 per cent in the previous survey), 46 per cent expect conditions to stay the same (up from 38 per cent) and 38 per cent expect a deterioration (slightly down from 40 per cent last quarter).

Excessive rain (45 per cent) and rising input costs (43 per cent) topped the list for farmers who expect the agricultural economy to worsen, while on the other side of the ledger, good seasonal conditions (46 per cent) and rising commodity prices (56 per cent) were the main reasons for anticipated improvement.

“The situation still facing Victorian farmers can broadly be distilled into one word: saturated,” Rabobank regional manager for Southern Victoria and Tasmania, Deborah Maskell-Davies, said.

Digging deeper into these figures reveals how the season has played out across different regions and commodities.

Significantly more farmers in the flood-plagued Murray Goulburn Valley (67 per cent) and Victorian high country (69 per cent) tipped rain as a cause for conditions to worsen than in other regions of the state. Grain growers (77 per cent) were also most likely to list rain as a cause for concern, compared with other commodities.

The disruption to the typical spring harvest and fodder conservation program has created supply issues in accessing fodder in the short term, especially for dairies, and has delayed summer planting.

While some grain growers are still anticipating good quality grain coming through when harvest eventually gets underway, it has been hit and miss.

Input costs remain a concern for Victorian farmers, especially grain growers, who are looking ahead to next year’s crops and crunching the numbers.

A reduced expectation of rising commodity prices reflects the plateauing or even softening of grain, wool, beef and lamb/sheep markets, however dairy remained strong.

Victorian beef producers (12 per cent, up from five per cent) showed increased confidence in the agricultural economy improving, with only 23 per cent (35 per cent last quarter) expecting conditions to worsen.

Biosecurity concerns have fallen off the radar – whereas 92 per cent of Victorian respondents said they were extremely or very concerned about foot and mouth disease (FMD) in the last quarter, no one listed it as a concern in the most recent survey.

Dairy sector confidence was down in the state, with too much rain the principal concern.

When it comes to expanding, Victorian farmers still appear to have an appetite for property purchase, with 24 per cent of those planning to increase investment in their business intending to purchase property (up from 19 per cent last quarter).

A comprehensive monitor of outlook and sentiment in Australian rural industries, the Rabobank Rural Confidence Survey questions an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis.