Decent rainfall over summer and strong prices for nearly all major commodities produced in the state, have combined to push optimism in the sector’s prospects to their fifth highest level in two decades.
The latest Rabobank Rural Confidence Survey, which has taken the pulse of Australian farmers since 2000, has found more than a third of Queensland’s primary producers (37 per cent) expect improved conditions in the agricultural economy over the coming 12 months.
That’s up three per cent from the figure recorded in March, while close to half of those surveyed (49 per cent) anticipate similar conditions to last year and just 11 per cent a deterioration.
The survey found cotton producers to be particularly ‘bullish’ about their prospects, with 64 per cent (from 55 per cent) expecting business conditions to improve in the coming 12 months. Of these, 93 per cent attributed their optimism to the good season.
With the survey results released today, InQueensland contacted Cecil Plains cotton grower Tyson Armitage, who was on his tractor planting winter crops to take advantage of a full soil moisture profile that was delivered over summer and into early autumn.
Even without more rain between now and next summer, he estimates he will still have enough moisture in the ground, coupled with ample on-farm water storage and access to allocations from Leslie Dam, to plant his 200 hectares of cultivation with cotton in October and November.
“I don’t want to be over-confident, but prices are just too good at the moment and there’s every indication that they’ll hold for a lot longer,” he said.
“We also had a great finish to summer, which has allowed us to plant wheat and chick peas over this winter and then heading back to cotton in the summer.
“That doesn’t happen very often, when you have both strong prices and the favourable seasons going your way at the same time – so you could say I’m a very happy farmer at the moment with nothing to complain about.”
Rabobank regional manager for southern Queensland and northern New South Wales, Brad James, said while many of the state’s farmers were still in recovery-mode, the legacy of drought was no longer dragging down sentiment in the sector.
“The survey clearly indicates that producers are now well and truly back in the driver’s seat rather than having to take the path dictated by drought,” he said.
With farmers now “looking forward”, James said, there was a feeling of confidence as they went about rebuilding herds and re-establishing crops.
“Most of our clients who have suffered through the drought have come through in good financial shape and it just speaks volumes about the strength and resilience of their businesses,” he said.
Beef and sugar producers were the most upbeat about prospects in their commodity markets, the survey found, while farmers in the Darling Downs were particularly positive about the season.
Farmer confidence has a direct bearing on investment, such as spending on farm infrastructure like fences, yards and silos, irrigation equipment, livestock and plant and machinery.
In terms of investment, the survey found 30 per cent of the state’s farmers are looking to increase investment in their farming businesses over the coming 12 months, while a further 61 per cent are planning to maintain it at current levels.
“When you have strong confidence like we have at the moment, there is a propensity to invest,” James said.
“And we are seeing this in the rural property market, with record land prices and no shortage of people in the market trying to buy land.”
In Queensland’s grains sector, while confidence edged back slightly, it remained strong – with 41 per cent of grain growers expecting operating conditions to improve and a further 52 per cent expecting similar conditions to the past 12 months.
With two-thirds of the state still drought declared, some key farming regions are in need of rain, although broadacre farmers with wheat in the ground are tipped to deliver what could be a record harvest later this year.
The state’s beef producers are also upbeat about their prospects, the survey found, with 34 per cent expecting an improved 12 months ahead and 57 per cent expecting stable conditions.
“As for the beef industry it really is as good as you can get,” James said.
While sentiment in the sugar sector continued to lag behind cotton, grains and beef, the state’s sugar producers posted a strong upswing in confidence, with the percentage expecting conditions to improve almost doubling from 23 per cent last survey to 40 per cent.
“The state’s sugarcane crop is tipped to rise to almost 30 million tonnes this year – which would exceed both the 2020 and 2019 seasons – at a time when prices are expected to hover around AUD 440 to 450 a metric tonne in 2021,” James said.
In line with the stronger confidence prevailing in the state’s agricultural sector, Queensland farmers also had expectations of improved farm incomes over the coming year, with 41 per cent (from 38 per cent) expecting a higher gross farm income in 2021/22, while 42 per cent expected a similar bottom-line to last financial year.
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