By SONJA KOREMANS
TWO-thirds of farmers are actively preparing for drought but remain remarkably upbeat about the rural sector’s outlook.
With an El Nino weather pattern emerging, and ongoing severe drought in Queensland and New South Wales, farmers are implementing measures to mitigate the impact of weather extremes on their businesses.
However, most farmers view their businesses as having viability, buoyed by elevated commodity prices as well as favourable seasonal conditions across much of southern Australia, according to Rabobank research into rural confidence levels.
Overall sentiment about the industry is positive in all commodity sectors except sugar, where excessive global stocks have been weighing on prices.
The bank’s latest quarterly survey found that 94 per cent of farmers believe their businesses are financially sustainable, while 38 per cent of farmers felt conditions in the Australian agricultural economy should improve in the year ahead.
Only 14 per cent believe business conditions for their sector will deteriorate.
Rural confidence was strongest in Western Australia and South Australia where it reached four-year highs.
Rabobank executive for Country Banking Australia Peter Knoblanche said several positive factors had aligned for farmers, including low interest rates and the depreciation of the dollar against a backdrop of reasonable seasonal conditions in much of Australia.
“Most of southern Australia has received good autumn rains, which has supported farmers’ cropping programs and given pastures a boost going into winter,” Mr Knoblanche said.
While no amount of drought-preparedness would alleviate the impact of the severe drought in eastern Australia, farmers are taking a proactive approach to drought-preparedness, he said.
“Overall, 69 per cent of farmers indicated that they actively adopt measures to help mitigate dry conditions, with drought-preparedness highest in New South Wales,” he said.
“Measures that farmers adopt include storing feed and growing fodder, managing livestock numbers, investing in water and irrigation infrastructure and careful cash flow management.”
Any concerns about an El Nino weather event weren’t pronounced in this survey’s findings but seasonal conditions and commodity prices were underpinning much of the positive sentiment this quarter, he said.
The beef and the sheep industry continued to underpin much of the positive sentiment during the quarter.
Confidence remains positive among the nation’s grain and cotton growers with autumn rains giving farmers the green light to get their crops in.
