Victorian producers worried about prices, Rabobank survey finds

Victorian farmers are increasingly concerned about the effects of the coronavirus pandemic on commodity prices — but there are two groups of producers in particular who are lacking in confidence.

Sheep farmers are concerned about commodity prices and low consumer sentiment. Picture: Alex Coppel

COVID-19 has rattled Victorian farmers’ confidence, but none more so than those in the sheep industry who are fearing deflated commodity prices and depressed export markets in the months ahead.

Rabobank’s latest Rural Confidence Survey reveals a third of Victorian farmers are pessimistic about the near future, with many worried the coronavirus pandemic will continue to impact agriculture in Australia and overseas, and particularly affect commodity prices.

But confidence was lacking most among sheepmeat and wool growers who are bearing the brunt of a softening in demand caused by weak consumer confidence with the unravelling of the pandemic.

Sheep Producers Australia chief executive Stephen Crisp said because of sheep meats’ heavy reliance on the service industry, demand for lamb across the world had taken a hit.

“And with the relative high prices we’ve been having over the past few years, we have seen a retracement in the months since the virus hit. So I can understand a lessening of confidence among sheep producers,” Mr Crisp said.

But he said signs of a turnaround were emerging. “It’s not all doom and gloom, the domestic market has always been a major part of our sheepmeat sales and there seems a willingness from Australian consumers to support local butchers and domestic red meat. We are seeing a slight bounce in the market, so we’re still in a good position to ride it out and I’d still rather be in sheep than in a lot of other commodities.”

Dairy farmers and grain growers remained positive about this season’s prospects given strong dairy prices and forecasts of a bumper harvest for the cropping sector.

The survey tracks the outlook and sentiment in Australian rural industries by interviewing 1000 primary producers across a range of commodities across Australia four times a year.

Rabobank regional manager for Southern Victoria Deborah Maskell-Davies said concerns about COVID-19 were now weighing heavily on some producers, however many were still upbeat about the season given a turnaround in conditions.

“Strong farmgate milk prices for dairy combined with a major turnaround in seasonal conditions is driving confidence for the state’s dairy producers, with 60 per cent expecting little change in agricultural economic conditions, while 20 per cent were forecasting an improvement,” Ms Maskell-Davies said.

Confidence has dipped in every part of Victoria except in Gippsland, where dairy prices and excellent winter rain have boosted optimism in an area so recently beset by drought and bushfire.

Farmers in the south west and the Wimmera/Mallee were the most pessimistic about the season ahead given the recent downturn in wool pricing.

Ms Maskell-Davies said the Victorian rural property market was “incredibly strong” and many farmers planned to expand.

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