Confidence takes tumble in dry season
A LACK of early spring rain has seen Tasmanian farmer confidence dip to a 15-month low.
Results from the latest Rabobank rural confidence survey show very dry conditions in October had a big impact on farmer sentiment. After leading the nation, confidence in Tasmania now lags behind the rest of the country except NSW and Victoria.
However, recent rains since the survey was completed are s expected to boost confidence.
While 57 per cent of Tasmanian farmers expected little change in agricultural economic conditions over the coming 12 months, 30 per cent held a negative view, up from 18 per cent in the September quarter.
Dry conditions were the key driver of this pessimism, with 83 per cent of farmers saying this was the reason conditions were likely to worsen.
The survey also found Tasmanian farmers felt generally well prepared for dry conditions, reporting strong business viability and plans for ongoing investment.
A total of 95 per cent of those surveyed indicated a level of preparedness for drought, with more than half stating they more prepared now than five years ago.
Rabobank branch manager for Tasmania Kathryn Brown said investment in water infrastructure had helped mitigate the impact of dry conditions, with irrigation schemes being built and work such as dams also taking place on farms.
Ms Brown said many traditional grazing properties now had the infrastructure to diversify and grow irrigated fodder crops.
The percentage of respondents expecting better conditions fell to 13 per cent, down from 20 per cent.
Ms Brown said momentum from early spring rains was sapped when the state recorded its third-driest October.
Since then the state had received a spring break, with rains of 25mm to 100mm across much of the state.
“While the rain has been received later in the spring, it will still provide benefit to those who are doing late silage and hay conservation and will give irrigators some reprieve.”
Ms Brown said the dry October had led to irrigation programs starting early.
She said costs had also been pushed up by grain and fertiliser prices with dairy farmers in particular feeling the pinch.
She said some producers had reduced their feed rations slightly to buffer the increase in feed prices and this could see milk production fall.
Tougher dairying conditions saw confidence in the sector fall, with no surveyed dairy farmers expecting conditions to improve and a third expecting deterioration .
With milk prices in line with forecasts, dairy farmers felt better about the outlook for their gross farm incomes, with 42 per cent expecting an increase next year.
Overall 92 per cent of Tasmanian farmers expected incomes to improve, or remain the same over the next year – just shy of the level reported by farmers in Western Australia.
Tasmanian farmers’ investment intentions were strong, with 80 per cent to maintain their level of investment.
Those planning to increase investment fell to 17 per cent, and half of those were looking to expand by buying property.