A quarterly survey by Rabobank has found that rising input costs and dry weather in parts of Australia during the winter crop planting season have reduced confidence levels among the country’s farmers.
Australia is a major global exporter of agricultural goods, and farm confidence had rallied earlier in the year after rains doused most of the country. However, Tasmania, Western Australia, and South Australia have dried out in recent months, threatening crop yields and pasture conditions.
According to the Rabobank survey, only 15% of Australian farmers expected the agricultural economy to improve in the coming year, down from 31% three months earlier. Meanwhile, 36% of respondents expected conditions to worsen, up from 16% in the previous poll. 46% thought the situation would remain stable.
The bank conducted the survey before recent rains helped calm nerves in the dry areas. Cotton growers were the most optimistic group, with expectations of a good season and rising commodity prices.
Overall, the confidence level is at a level typically seen during periods of pronounced and widespread dry weather, such as in 2023 and 2018-2019.
“Although confidence has come down from the high levels we’d seen at the beginning of the year, overall conditions in the agricultural sector are still good,” said Rabobank executive Marcel van Doremaele. He noted that rainfall in many regions has set up favorable planting conditions for the winter cropping season, and the potential for a La Nina weather pattern in the second half of the year holds additional promise.
Van Doremaele also pointed out that while commodity prices are down from very high levels seen a couple of years ago, they are still overall reasonable for grains, dairy, and cotton.