Rabobank: Rural sector sentiment on the rise

Strong commodity prices and optimism about the season ahead has boosted rural sentiment, according to a recent survey. See the latest.

Rural confidence has returned to positive territory for the first time since June 2022, but farmers say input costs are still a burden.

Optimism about the season and a return to better commodity prices were cited as reasons for the renewed confidence, according to the latest Rabobank Rural Confidence Survey released on Wednesday.

Rural confidence levels in Victoria were found to have increased from -39 per cent, recorded last quarter, to +21 per cent.

The number of Victorian farmers who anticipated agribusiness economic conditions would decline in the year ahead fell from 52 per cent last quarter to just 15 per cent this quarter.

However, farmers say there is still a long way to go at a farmgate level.

Winslow farmer and president of United Dairyfarmers of Victoria Bernie Free said both seasonal conditions and the upcoming milk prices were a concern.

“It was nice and green about a month ago, and things quickly turned brown,” he said.

Mr Free conceded there was still time for an autumn break and farmers were holding out for rain from now on.

He said there was angst about how the opening milk prices might look once announcements start on June 1.

“I think farmers are taking a wait-and-see approach, but there is concern about what the milk price is going to be,” he said.

“Farmers cannot produce milk at a loss just to supply the factories.”

Mr Free said the current milk price was averaging around $9.20/kg milk solids.

“With the ever-increasing costs in front of us and red tape, the cost of farming is getting dearer,” he said.

NSW Farmers dairy committee chairman and Bega dairy farmer Phil Ryan said all rural producers were concerned about the costs of production.

Mr Ryan said milk prices were trending slightly above $10/kgMS in his area; however, seasonal conditions also had to be taken into account.

The Rabobank survey found 42 per cent of farmers were concerned about the rising input costs of farming.

Buyers place their bids at the rail. Picture: Zoe Phillips

Rabobank regional manager for Southern Victoria and Tasmania, Deborah Maskell-Davies, said the season hadn’t been without challenges, with fires and storm damage all affecting rural production in Victoria.

Of the dairy farmers surveyed, 61 per cent believed conditions in agriculture would remain unchanged in the near future.

Meanwhile, beef sector confidence also increased, with 40 per cent of producers expecting conditions to improve in the next 12 months, compared to just 16 per cent in the last survey.

Despite the improved livestock sentiment, the Eastern States Young Cattle Indicator for Victoria was tracking at 472.75c/kg on Wednesday, representing a drop of 143.71c/kg compared to this time last year. The Eastern States Trade Lamb Indicator for Victoria was sitting at 603.87c/kg on Tuesday, 114.06c/kg less than last year.

The survey found confidence among grains and cropping farmers was relatively stable.