AUSTRALIAN farmers continue to ride the rollercoaster of seasons, commodity prices and economic factors, with rural sentiment across the country dipping to its lowest level reported since late 2018.
While the rest of the country has recorded a drop in confidence in the quarterly Rabobank Rural Confidence Survey due to a range of economic and financial uncertainties, Western Australian and Tasmanian producers are looking to the year ahead with increasing optimism.
For WA, the latest survey found 13 per cent of the State's farmers are expecting conditions in the agricultural economy to improve in the coming 12 months (up from 9pc with that view last quarter), while 53pc expect the current economic conditions to be maintained.
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And, although 34pc of WA farmers surveyed anticipate business conditions to worsen in the coming 12 months, this was an improvement on 38pc last survey.
Rabobank regional manager Western Australia, Steve Kelly, said the lift in agricultural sector sentiment reflects the positivity generated by WA graingrowers harvesting and delivering the State's second consecutive record-breaking winter grain crop, which was "a significant achievement".
"The State's graingrowers faced some challenges in 2022 - dealing with high input costs, staff shortages and lengthy machinery delivery delays - to produce a bumper crop for a second time," Mr Kelly said
And this demonstrates the resilience of our farmers.
The survey found the State's grain farmers were particularly concerned about the impact of high input costs.
Easing commodity prices and labour shortage challenges were also a worry for the grain sector.
Nationally, the number of farmers expecting the agricultural economy to improve over the coming 12 months dipped to 11pc in the first quarter of 2023, compared with 15pc in December 2022.
With a tough few months for commodity prices, 68pc of farmers expected commodity prices to worsen, a significant increase on 21pc previously, while rising interest rates were also an increasing concern (20pc, up from 11pc).
However, WA farmers also cited commodity prices as a reason to be positive for the upcoming year - with wheat prices expected to stabilise in the coming months, while dairy and beef prices are expected to stay strong.
There was some relief though around the high cost of farm inputs - such as fuel, fertiliser and energy - but this remains a concern for 35pc of farmers expecting conditions to worsen over the next 12 months (down from 49pc last quarter).
There was increased confidence in overseas markets/economies contributing to good economic conditions - nominated by 26pc as cause for their positive outlook (up from 18pc).
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Rabobank Australia chief executive officer Peter Knoblanche said the latest survey reflected the combination of commodity prices, global economic challenges and high production costs facing farm businesses.
"Despite having their resilience tested throughout 2022, most Australian farmers ended last year on a high, buoyed by seasonal conditions and high commodity prices which saw our industry break farm production value records for the third year in a row," Mr Knoblanche said.
"This survey captures their realistic expectations that commodity prices will likely not return to the highs this year that we saw in the previous 12 months."
Weather is high on the list of concerns, with a drier year predicted this year by the Bureau of Meteorology.
Thirteen per cent of farmers who have a negative outlook, reported being concerned about drought, up from just 2pc with that concern in the previous quarter.
Likewise, concern about too much rain fell from 32pc to just 6pc.
"The, at times, excessive rain in 2022 did set up our nation's grain farmers for record harvests and maintained beneficial feed base conditions for livestock businesses through summer, but again, we see the realistic expectations that 2023 won't present the same conditions," Mr Knoblanche said.
In contrast to WA, only one in 10 producers expect agribusiness conditions to improve in Queensland, while farmers in New South Wales and Victoria had low confidence after a delayed harvest from heavy rains.
Nationwide, there was a very slight edging up in net confidence in the grain sector.
The number of grain growers who expect the agricultural economy to improve fell from 17pc to 14pc, but this was offset by the number expecting it to worsen falling from 38pc to 33pc.
For the graingrowers who expect conditions to improve, their buoyant outlook was attributed to a good season (54pc) and lower input costs (17pc).
Graingrowers who believe economic conditions will deteriorate flagged falling commodity prices as being more front of mind this quarter (59pc up from 16pc last survey), along with rising interest rates (27pc up from 5pc) and the re-emergence of drought (18pc up from zero).