THE confidence of WA farmers in their own enterprises and optimism for the future leads the nation, according to results of a quarterly survey released this week.
The final Rabobank Rural Confidence Survey for 2018 found WA farmers had “bounced back” from a “rollercoaster year” with their confidence now higher than it was earlier in the year when they were waiting for rain.
Their growing confidence following a late season break was in contrast to the opinions of farmers in drought-affected Eastern States, the survey found.
Completed in November when more than one third of WA’s grain harvest had been delivered, the final quarterly survey for the year found 39 per cent of WA farmers had a positive outlook on the agricultural economy in the coming 12 months.
This was up from 30pc in the previous quarter with WA farmers “by far the most buoyant” about their prospects for the year ahead, Rabobank said.
Of the remainder of WA farmers surveyed, 38pc expected the agricultural economy to remain stable.
Significantly, Rabobank pointed out that only 18pc of WA farmers expected conditions to deteriorate, down from 30pc previously.
The latest results represented “a steep recovery from the subdued confidence levels” recorded in WA’s rural sector in the middle of the year, Rabobank said.
This contrasted, it said, with national farmer confidence which has shown early signs of a recovery over the past quarter – following spring rains in some drought-impacted parts of the Eastern States – but remained at low levels.
Long-term confidence in the rural sector was strongly reflected, with 95pc of WA farmers saying they felt their business was viable and 100pc of grain growers holding this view.
Rabobank WA regional manager Crawford Taylor said the anxious wait for rain by many farmers earlier in the year had been well rewarded.
“While both grain growers and livestock producers started the year off in a good position, we had already been through a long dry, hot summer and we saw tensions begin to mount as the wait for a decent break continued,” Mr Taylor said.
“By the time the mid-year survey was taken (in May), there still hadn’t been any substantial rain and we saw the rural confidence indicator hit a five-year low.
“Finally, by early June we received the rain we needed and many farmers – apart from in the south coast which remained dry – saw a complete turnaround in their fortunes and have had one of their best years, particularly in the northern Wheatbelt.“
With harvest part completed in all WA zones, grain growers have retained improved confidence levels that were reached last quarter and with optimism running at 43pc, theirs was now the brightest commodity sector.
Mr Taylor said their positive outlook contrasted with grain growers in most other parts of Australia and reflected “a situation of decent yields in the west being met with a spike in domestic pricing caused by tight supply in the east”.
“It was by no means an ideal start to the WA cropping season this year, but when the rain did finally come, most growers were in a situation to take full advantage of it,” he said.
“With the soft finish to the season and strong prices continuing, there are a lot of grain growers in the State who will experience a strong financial performance and it’s a testament to many years of hard work and investment that they are now enjoying this reward.”
WA’s growing rural confidence was also driven by sheep graziers, with 39pc having a positive outlook on the coming 12 months.
“At the time of the previous survey, concerns over changes to the live export market were being felt across the industry,” Mr Taylor said.
“In the middle of the year there was a suspension on live sheep exports for the northern summer.
“With sheep already destined for the boats, producers were worried about the price impact and their ability to hold over large numbers of stock given the later start to the season.”
While there had been some volatility in sheepmeat prices, Mr Taylor said they remained above five-year averages.
“Another factor that has helped buoy the confidence of sheep producers has been the exceptional wool price experienced throughout the year,” he said.
“While it has pulled back recently, it would have softened the financial blow of having to hold stock on farm for longer.”
WA beef and dairy producers were not as optimistic about their outlook, with an equal percentage surveyed negative as positive, Mr Taylor said.
Concerns about drought and threats to live export were highlighted by beef producers and record feed grain prices hitting dairy producers were key reasons for their more subdued outlook.
Seasonal conditions for most beef producers across WA had improved substantially, Mr Taylor noted.
“The very dry start to the year had graziers beginning to get worried and some had already started looking at plans to begin reducing stock numbers, but the turnaround in May put a halt to those plans and they are entering summer in a pretty good position,” he said.
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Claimed to be the most robust study of its type in Australia and conducted since 2000, the Rabobank Rural Confidence Survey questions an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia.
For the current quarter it also questioned farmers about their level of drought preparedness, finding 91pc of WA producers felt either somewhat or very prepared to handle drought and its impact on their business.
They also indicated their ability to manage drought had improved in recent years, with 61pc saying their businesses were better prepared for drought than five years ago.
“To survive in agriculture in Western Australia, our farmers have become very good at handling periods of dry conditions and also to effectively manage any moisture that comes their way,” Mr Taylor said.
“They’ve continued to learn from past experiences, to reach out to specialists, to engage in training and development and participate in grower groups to aid learning, but also to mentor others within the industry.
“There are many farmers who are doing great things to improve their environment and farm practices to ensure the health of their animals and land.
“These are stories that often go untold, but I think farmers are becoming increasingly aware of the need to engage with consumers and tell their story.
“While in WA, our producers are often farming in quite challenging environments, they should feel confident in their ability to continue to evolve and adapt to meet these challenges head on.”
Bullish projections for on-farm income continued this quarter and flowed through to investment intentions with appetite for rural property acquisition particularly strong in WA.
Here, 43pc of farmers surveyed said they intended increasing investment and were looking at property purchases, compared to the national average of 21pc.
“We’re in an exciting position for agriculture in WA,” Mr Taylor said.
“There are of course some challenges to keep an eye out for, but there is plenty going our way, including the majority of commodity prices, the Aussie dollar, low interest rates and a pretty decent season.”