SA farmers outlook brighter in latest Rabobank survey with cattle prices strong

Cattle farmers are helping SA buck a national trend.

DESPITE a worrying dry start to the grain growing season, South Australian farmers are still managing to defy the national trend and are reporting rising confidence levels in the year ahead, according to the latest Rabobank Rural Confidence Survey.

The positive mood is particularly being driven by livestock farmers in the state’s South East pastoral region, but overall sentiment across the state rose for the third consecutive quarter as beef and sheep producers continue to see strong commodity prices. However, Rabobank regional manager for SA Roger Matthews said despite livestock producers driving rural confidence in the state higher, it was a different story for those in cropping and dairy.

“The season’s definitely been patchy, but there has been a decent break in the South East benefiting livestock producers and grain growers,” Mr Matthews said.

“For grain growers, the outlook seems less certain.

“While most farmers have got their crop in the ground, rainfall has been patchy, particularly on the Eyre and Yorke peninsulas, and growers are definitely starting to get concerned about the possibility of another dry year.”

The survey released yesterday was completed last month and it showed nearly a third of SA farmers (31 per cent) were anticipating improved economic conditions over the next year compared to 18 per cent last quarter.

Another 43 per cent expected conditions to remain stable.

The survey reflected seasonal differences in rain with confidence levels strongest — and significantly up on last quarter — in the South East.

Some 35 per cent of farmers in that region expected conditions in the agricultural economy to improve and only seven per cent feared a decline.

Mt Gambier cattle sale with Elders auctioneer Aidan Auld and Ben Gregory selling Angus steers.

Meanwhile, on the Yorke Peninsula, 32 per cent of farmers had a positive look on the year while another 21 per cent were concerned about the future season.

On Eyre Peninsula, the figure was worse with 23 per cent feeling positive compared to 33 per cent concerned about worsening conditions.

Statewide, those farmers expecting a decline in the rural economy in all regions appeared to be basing their state of mind on seasonal conditions, while rising commodity prices were the chief contributor on the positive side of the ledger.

Mr Matthews said confidence was strongest among livestock producers with 38 per cent of beef and 36 per cent of sheep producers expecting economic conditions to improve in the year ahead.

“While beef prices have pulled back a bit over the past 12 months they seem to have stabilised at still relatively high prices,” he said.

“With the dry conditions we are seeing over a lot of the east coast, sheep numbers were culled quite heavily in April and we saw that push prices down but we’re starting to see prices lift a little in line with the normal seasonal trend heading through winter.”

Most SA producers (55 per cent) expected a similar financial result to last year, 24 per cent expected it to improve and 18 per cent believed their income would be less this year.

Income expectations were highest in the sheep sector with 42 per cent of producers expecting higher incomes.

Mr Matthews said while many were in a position to invest, the rapid increase in property prices had likely contributed to subdued intentions.