On The Land
26 September, 2024
Confidence growing for producers
QUEENSLAND primary producers are reporting a more bullish outlook on the year ahead, with seasonal conditions and expectations of rising commodity prices the main drivers of optimism, the latest quarterly Rabobank Rural Confidence Survey has found.
The survey questions an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis.
The recovery in the state’s rural sentiment is in line with overall national farmer confidence, which rose across the country this quarter.
The quarter three survey, completed last month, found Queensland rural confidence had increased to a net reading of -4%, from -13% in quarter two.
Although net confidence remains in “negative territory” - with more producers pessimistic than optimistic about the year ahead - an increasing number were expecting the agricultural economy to improve in the year ahead – 19% compared with 15% in the previous survey.
Fewer now expect agribusiness conditions to worsen – 22% compared with 28% previously. Over half of those surveyed (54%) expected conditions to remain the same.
Good seasonal conditions were nominated by 37% of surveyed Queensland producers as a key reason for their optimistic view, while improving commodity prices were noted by 30%.
The survey found concerns around rising input costs had fallen this quarter (nominated by 29%, compared with 39% previously), while soft commodity prices were also seen as less of a worry (for 18%, down from 28% previously).
Rabobank acting state manager Brad James cited improving trade relations with China as a source of optimism for primary producers.
“The relaxation of trade embargoes has allowed for confidence to build within the agribusiness sector that China – a key market for Australian produce – is coming back online,” he said.
Over a quarter (26%) of Queensland producers nominated overseas markets/economies as a reason for their positive outlook on the coming 12 months.
For the state’s beef producers, Mr James said, the survey found a lift in positivity about the opportunities provided by international markets and economies (for 26%, up from 22% last quarter).
“And while not great, cattle prices are solid,” he said.
“We saw cattle prices rise through July with cows and heavy steers showing the largest rise, but encouragingly the young cattle prices also rose as the US market starts to have an impact across all cattle categories.”
Mr James said the bank held an expectation that cattle prices should continue to rise in the coming months.
Sentiment was subdued among Queensland sugar cane growers surveyed.
“Sugar prices have eased in recent months and this softening of the market will be holding back grower sentiment,” Mr James said.
Overall, Queensland primary producers’ investment intentions remain stable this quarter, with 27% expecting to increase investment in their farm businesses over the coming 12 months (compared with 25% last quarter), 13% to decrease investment (up from 11%) and over half (59%) planning to leave investment levels unchanged.
The survey found the most commonly-planned areas for investment were on-farm infrastructure – new fences, yards and silos (for 53% of Queensland producers), irrigation/water infrastructure (27%) and adopting new technologies (33%).
However, fewer Queensland producers are looking to increase livestock numbers this quarter (23%, down from 29% last quarter).
There was found to be an increased appetite for purchasing additional agricultural land – up to 14% of those surveyed, from 9% previously.
