Much-needed rain helps lift confidence across key farming regions
After a challenging start to the year, Australia’s farming sector is showing signs of recovery. Recent improvements in livestock prices and much-needed rainfall in key cropping regions have led to renewed optimism among farmers, according to the latest Rabobank Rural Confidence Survey.
Rabobank’s third-quarter survey indicates that while overall sentiment remains just below positive levels, the outlook has improved across every state except for cotton growers, where conditions have worsened. A surge in optimism was particularly noted in livestock-heavy regions, with farmers encouraged by improved market signals for sheep and cattle.
Group executive for country banking Marcel van Doremaele (pictured) noted that the turnaround in several areas has helped lift confidence.
“Although some parts of the country are still grappling with the impacts of unusually dry weather through autumn and winter, it’s encouraging to see the patchy start to this year’s season have been corrected in many farming regions, especially in WA where seasonal conditions looked dire last quarter but have really turned around,” van Doremaele said.
Livestock producers were among the most optimistic, which are buoyed by stronger cattle and sheep prices. On the other hand, grain and cotton farmers are facing tougher conditions, with global market forces putting downward pressure on commodity prices.
“So, some easing of economic pressures, combined with useful winter rainfall for those regions which received it, has seen many farmers are tracking towards the end of the year with a more positive mindset. Others, though, do remain glued to the outlook and in need of a wet spring to finish crops and replenish feed reserves to ease pressure on feeding livestock,” van Doremaele said.
The survey found that 23% of farmers expect the agricultural economy to improve in the next 12 months, up from 15% in the previous quarter. Meanwhile, the proportion of farmers expecting conditions to worsen has dropped significantly, from 36% to 27%.
Confidence levels varied by region, with Tasmanian farmers showing the highest levels of optimism due to better livestock markets and timely winter rainfall. New South Wales farmers also returned to net positive confidence as drought and commodity price concerns eased, while confidence in Victoria, Queensland, and South Australia saw notable improvements in the negative.
Western Australia’s farmers saw a modest increase in confidence, aided by rainfall that brought relief to livestock producers. However, concerns linger over the federal government’s decision to end live sheep exports by 2028, which has cast uncertainty over the future of the state’s sheep industry.
Cotton was the only commodity sector to see a drop in confidence, with concerns over falling prices and global demand weighing heavily on growers. Meanwhile, grain growers saw a slight improvement in sentiment, supported by better seasonal conditions and easing input costs.
Investment intentions among farmers have also risen slightly, with 24% planning to increase their farm investments in the next year, up from 21% last quarter. Farmer income expectations have similarly improved, with 30% expecting higher earnings in the coming year.
