Winter Rain And Favourable Commodity Prices Buoy Australian Farmer Confidence

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30th August 2010, 10:25am - Views: 955
Winter Rain and Favourable Commodity Prices Buoy Australian Farmer Confidence

Australian farmers are increasingly optimistic about the outlook for agriculture with winter rainfall and firm commodity prices fuelling sentiment, according to the latest quarterly Rabobank Rural Confidence Survey.

Australian rural confidence is now at a two and a half-year high.

The survey completed earlier this month found 37 per cent of farmers expected conditions to improve in the coming year, up from 29 per cent in the previous quarter. The number of farmers expecting conditions to worsen decreased to 13 per cent, down from 23 per cent last survey.

A comprehensive monitor of outlook and sentiment in Australian rural industries, the Rabobank Rural Confidence Survey questions approximately 1300 farmers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis.

Rabobank general manager Rural Australia Peter Knoblanche said the latest survey had seen a general lift in farmer confidence as a result of consistent winter rains, particularly in the eastern states, with the biggest increases among those sectors also enjoying strong commodity prices, such as grain and dairy.

"Good late autumn and winter rainfall which fell across New South Wales, Victoria, Tasmania and parts of South Australia, Queensland, and southern Western Australia provided a real boost for farmers in these areas. In many regions, rain came at an ideal time for the planting of grain, while follow-up falls have helped to sustain crops," he said.

"The most remarkable aspect of the falls through winter has been the consistency of rain in many areas. Most producers have come to expect a mid-season lull and have become resigned to waiting anxiously for finishing rain toward the end of the season. This winter, the steadiness and wide dispersion of rain has positively impacted large swathes of the eastern states, particularly in the south. Additionally, the rain has been substantial enough to significantly improve storage levels in some major dams, to the delight of irrigators."

The latest Rabobank Rural Confidence Survey showed the expectation of favourable seasonal conditions was the main driver behind increased farmer confidence this quarter.

The survey observed the biggest increase in confidence among grain producers.

"Russia's worst drought in 100 years and, to a lesser extent, downgrades to European and Canadian crops, have impacted global production outlook and had a
dramatic effect on the wheat market, with international prices soaring to an 18-month high in July, before moderating in August," he said.

"Although this rally in prices has cooled, favourable weather conditions on the east coast of Australia have put Australia in the box seat."

This year, Australia is expected to produce between 22 and 23 million tonnes of wheat, and export near 15 million tonnes.

The latest Rabobank survey found rural confidence was stronger in all mainland states, with the largest increases observed in Western Australia and South Australia.

Mr Knoblanche said both these states had been buoyed by the commodity price outlook and winter rain albeit late and patchy in WA.

Overall, sentiment was highest among Victorian and New South Wales farmers. This quarter marks the sixth successive improvement in Victorian rural confidence and the fourth successive quarter that Victoria leads all states.

Sentiment was stronger across all sectors, with marked increases observed among dairy, as well as grain producers.

The next results are scheduled for release in November 2010.

Media contacts:
Denise Shaw
Public Relations Manager
Rabobank Australia & New Zealand
Phone: 02 8115 2744 or
0439 603 525
Email:[email protected]

SOURCE: Rabobank

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