Good seasonal conditions and booming commodity prices have driven a major recovery in farmer confidence among Western Australian farmers, with the latest quarterly Rabobank Rural Confidence Survey revealing they are among the most upbeat in the country.
All other states recorded a significant drop in confidence, except for Tasmania where rural sentiment eased but remained at healthy levels.
Rabobank regional manager for Western Australia Crawford Taylor said WA farmers were upbeat about improved farm incomes, with close to half of those surveyed expecting increased incomes over the next 12 months.
The results underscore a healthy WA farm sector, with 97 percent of farmers surveyed rating their farms as viable and one third of producers intending to increase investment looking at additional property purchase.
In a breakdown of the results, WA farmer confidence posted a recovery to neutral levels following the previous quarter’s drop, with respondents equally split on whether conditions would deteriorate or improve.
Confidence about an improvement in conditions has more than doubled since last quarter, with 30 percent expecting conditions to improve compared with 14 percent last quarter.
The state’s grain growers are driving this quarter’s surge – with WA grain producers by far the most positive farmers in the nation – with 54 percent expecting overall business conditions to improve.
A further 15 percent of grain growers expect conditions in the coming year to remain the same, while 31 percent expect conditions will deteriorate.
Mr Taylor said while commodity prices were a significant factor underlying confidence, seasonal conditions were now feeding into current optimism, improving significantly since last quarter.
“We have a combination of improving commodity prices in grain because of the east coast drought and dryness in other parts of the world which is fuelling domestic WA prices,” Mr Taylor said.
“But there are improving prospects for the season, pretty much right across the agricultural regions of Western Australia, which we’d probably rate at 85 per cent good to excellent.
“In WA we’re potentially looking at one of those years when seasons and prices across all commodities are going to play in the favour of farmers. Significantly boosted incomes are potentially the result of all of this.”
By region, the survey has found confidence to be well up in the central and northern Wheatbelt zones with 40 percent and 42 percent respectively expecting conditions to improve over the coming 12 months.
“But we’ve got to temper that enthusiasm a little,” Mr Taylor cautioned, “as we have another two months of growing season which is really going to determine the outcome, but you could say it’s looking good.”
Mr Taylor said the health of the agricultural sector in WA is strong, with 97 percent of farmers surveyed reporting viability – among grain growers that figure is now 100 percent.
“In the past four to five years we’ve seen a considerable improvement in the equity position of farmers across Western Australia and that could be boosted again from the 2018 production season,” he said.
The Rabobank Rural Confidence Survey questions an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis and is a comprehensive monitor of outlook and sentiment in Australian rural industries.