Rabobank survey finds 57 per cent of farmers optimistic about 2023

Despite high input costs, excessive rainfall and biosecurity concerns, more than half Australian farmers are looking to 2023 with confidence after a ‘mixed bag’ last year.

Farmers are looking to 2023 with growing optimism, despite a year plagued by high input costs, excessive rainfall and biosecurity concerns that took the edge off what was generally a year of good seasonal conditions and strong commodity prices.

The latest quarterly Rabobank Rural Confidence Survey found sentiment was edging back up after four consecutive quarters of decline, with fewer farmers now expecting agricultural business conditions to worsen on the back of a wet spring and easing concerns about commodity prices and biosecurity.

The survey showed more farmers are now buoyed by expectations of a good season with the highest level of seasonally-driven optimism seen in 2022 – nominated by 57 per cent of farmers with expectations of an improved year ahead, up from 35 per cent in the previous quarter.

However, this was tempered by those who are managing the fallout of too much of a good thing, with 32 per cent of farmers who expect the agricultural economy to worsen citing too much rain as a key reason, driven by a third La Nina which delivered flooding, damaging storms and record rainfall.

Rabobank Australia chief executive Peter Knoblanche said the survey reflected an enduring confidence in agriculture, despite the “mixed bag” of challenges Australian farmers continued to face.

“Domestic and global demand for our rural commodities underpins productivity and profitability across sectors, and, with three years of improved seasonal conditions now under our belts, farmers have the confidence to make long-term investments into their businesses,” he said.

“That said, we’re still seeing the seasonal resilience of farming businesses being tested – many have weathered droughts and bushfires to then face extreme wet conditions, which create challenges of a different nature.

“This has reined in the earlier seasonal optimism for some, while for others La Nina will deliver a record grain harvest and set up their feed base and soil moisture reserves for the new year. It certainly hasn’t been a one-size-fits-all this year, which is driving the varied responses of farmers across states and sectors.”

Rabobank Australia chief executive Peter Knoblanche.

The beef sector enjoyed a bounce in confidence, with 17 per cent of cattle producers expecting the agricultural economy to improve (up from 10 per cent last quarter) and only 22 per cent expecting it to worsen (down from 36 per cent).

Likewise, confidence among sheep producers also improved with almost half of sheep producers expecting conditions to remain the same (49 per cent, up from 45 per cent), and fewer now expect conditions to worsen.

The seasonal mixed bag was reflected in the sentiment of grain growers across the nation, with confidence in the sector falling, despite Australia being on track to harvest a third consecutive bumper winter crop.

The survey, completed last month, found 15 per cent of farmers were expecting improved business conditions in the coming 12 months (compared with 14 per cent last quarter), while 50 per cent had a stable outlook (up from 43 per cent). A total of 31 per cent expected operating conditions to deteriorate (down on the 36 per cent with that view previously).