Australian farmers have stared down one of the toughest summers on record with rural sentiment bouncing back to its highest level in nearly five years.
According to Rabobank’s Rural Confidence Survey, late-summer rainfall and strong commodity prices have boosted optimism about farm business conditions for the year ahead, reviving plummeting sentiment following one of the driest springs on record in 2019.
However, the results are tempered by the ongoing recovery in regions ravaged by bushfires across the country and those areas where there is still a significant rainfall deficit and ongoing drought.
The first survey of the new decade reveals one of the biggest upswings in confidence in the survey’s 20-year history, with 46 per cent of farmers surveyed nationally expecting the agricultural economy to improve over the coming 12 months – up from 17 per cent in the December 2019 survey.
Farmers were also positive about an increase in their own income, with 38 per cent of those surveyed nationally expecting gross farm incomes to increase over the next 12 months, compared with 23 per cent at the end of last year.
Rabobank Australia CEO Peter Knoblanche said there has been a great start for Australian farmers for the 2020 season, with widespread rainfall following years of drought and the recent shocking fire season.
He said strong commodity prices were now aligning with improved seasonal conditions, helping many farmers recover from long-running drought and move towards increased production again this year.
“With the fundamentals of demand and commodity pricing still firmly in Australian agriculture’s favour, many farmers are in a good position at the start of this year to take advantage of the improving season,” Mr Knoblanche said.
“These factors will help farmers break free from the shackles of drought and hopefully move into a more favourable production cycle, but further rain throughout the year will be crucial.”
Further rainfall received in early autumn, after the survey had been in the field, across large parts of the eastern states would likely have boosted rural confidence even further.
Nationally 38 per cent of farmers expect their gross farm income to increase, compared with 23 per cent at the end of last year. A further 39 per cent expect their incomes to stay the same (up slightly from 34 per cent) while 20 per cent expect a decrease in their incomes this year.
Over the next 12 months, one quarter of farmers surveyed said they expect to increase the total investment in their farm business over the next 12 months, up from 17 per cent, while 65 per cent said they would maintain investment at current levels (was 62 per cent).
This article was first published in The Fence magazine.