Strong A$ Dampens Farmers Confidence

AUSTRALIA - Farmer confidence was weaker across all states and all sectors in the opening quarter of 2012, compared with the end of 2011, according to Rabobank’s quarterly Rural Confidence Survey. The index finished at -12, with 28 per cent expecting conditions to worsen in the next 12 months compared to 16 per cent expecting conditions to improve.
calendar icon 29 March 2012
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The strong A$ was noted as the primary reason for the negative outlook, followed by falling commodity prices and overseas market conditions. On the positive side, the climate was reportedly the most positive influence for the annual outlook, with seasonal conditions expected to help production.

Income expectations for farmers were not as strong as those reported in the December quarter, although there was still a greater proportion expecting higher incomes in the next 12 months than lower incomes. At the same time, higher own-business investment is expected for most agricultural enterprises this year.

All states reported a weaker outlook than the previous quarter, with all except West Australia recording a negative index. Livestock farmers in West Australia were more optimistic, as falling grain prices and the high A$ offset the effect of a good recent harvest, and resulted in neutral expectations in the west.

This pattern was reflected across most of the country, although grain issues were more significant, given the widespread downgrading of quality, especially for wheat. Pasture conditions across the east (except for south-east South Australia and western Victoria) remain good heading into autumn, with the strength of the A$ expected to be the key driver of confidence in the livestock sector in the coming months.

TheCattleSite News Desk

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