A drier than expected winter has caused a collapse in sentiment among primary producers, with implications for businesses throughout the food supply chain.
The latest Rabobank Rural Confidence Survey polled around 1,000 primary producers nationally and found that sentiment among our farmers has dropped to a four-year low after a winter that brought record high temperatures and little rainfall.
While a four-year low may not sound drastic on its own, it is significant given it beats the hit to local farmer confidence wrought by cyclones in Queensland during that time.
The number of farmers expecting a worsening outlook over the next 12 months almost trebled to 27 per cent compared with the previous survey.
Concerns around the dry season were particularly heightened in the cropping sector, with 76 per cent of grain producers with a negative outlook blaming seasonal conditions.
“While early August rainfall provided a reprieve in some areas, conditions remain very dry in the central and northern cropping regions of Western Australia and across much of the eastern seaboard,” said Rabobank’s national manager, Country Banking - Australia, Todd Charteris.
“Victoria is the exception however, with much of the state receiving good falls in recent weeks, and that rain band extending into southern New South Wales and the north of Tasmania.”
However, long-term prospects for the agricultural economy remain overwhelmingly positive, with a near unanimous 95 per cent of respondents expecting their businesses to have long-term viability.