The latest Rabobank Rural Confidence Survey, released on Tuesday, reveals a decline in rural confidence across Victoria, Tasmania, and Western Australia. Farmers in these regions express increasing concern over lower commodity prices and potential changes in seasonal conditions.
In Victoria, despite enjoying generally good seasonal conditions, farmers' outlook for the year ahead has turned more pessimistic. The survey found net rural confidence in the state declined from -24% last quarter to -31%, with 44% of Victorian farmers now expecting business conditions to worsen over the next 12 months, up from 37% in the previous quarter. Lower commodity prices were cited as the chief cause for concern among farmers anticipating a decline in agricultural business conditions. However, Victorian grain producers remain optimistic, with 73% anticipating agribusiness conditions to either improve or remain unchanged in the year ahead.
Tasmanian rural confidence fell for the second consecutive quarter due to lower commodity prices and uncertainty about the upcoming season. The survey showed net Tasmanian confidence falling to -44%, down significantly from -30% last quarter. More than half of Tasmanian farmers now expect conditions to worsen, with declining commodity prices and increasing worry about drought being key factors driving this sentiment.
In Western Australia, rural sentiment fell further into negative territory, reaching its lowest level since September 2006. Net confidence dropped from -44% last quarter to -53%, with only 4% of the state's farmers expecting agricultural economic conditions to improve over the next 12 months and 57% expecting them to worsen. Unlike other states where falling commodity prices topped the list of concerns, government intervention and policies were cited as leading factors for half of WA farmers who anticipate worsening agricultural economy.
The survey also revealed that investment intentions among farmers continue to decline across all surveyed states. In Victoria, more farmers are looking to decrease investment in their farm business in the coming year, at 21%, up from 16% previously. In Tasmania, the number of farmers expecting to increase investment in their farm business over the next year has halved, down to 16% from 32% in the previous quarter. Similarly, in Western Australia, only 10% of farmers are looking to increase investment in their farm businesses, down from 17% in the previous quarter.
The Rabobank Rural Confidence Survey is a comprehensive monitor of outlook and sentiment in Australian rural industries. It surveys an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis. The next results are scheduled for release in December 2023.
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