Western Australian farmers remain the most confident in the nation, although they are entering 2019 with lowered expectations following last year’s bumper season, according to the latest Rabobank Rural Confidence Survey.
While WA's rural confidence has dropped on last quarter's results, farmer sentiment remains positive with a quarter of the state’s producers expecting conditions in the agricultural economy to improve in the coming year.
More than half of the WA farmers surveyed are anticipating similar conditions to last year, which had delivered solid returns for many in WA’s agriculture sector, while 18 per cent indicated they were expecting the agricultural economy to worsen.
Rabobank regional manager for Western Australia Crawford Taylor said after such a positive end to 2018 it was understandable that farmers were entering 2019 with somewhat moderated expectations.
“For grain farmers, particularly in the northern agricultural zone, 2018 will be one of the most profitable years they have had,” he said.
“Not only did they achieve above-average yields, but prices were exceptional.
"For those producers banking the proceeds, farm positions will have strengthened further with an increase in equity.
“We’re already seeing that improved equity position stimulate further investment both within the farm boundaries and prices above what we’ve seen previously for land acquisition.”
Mr Taylor said the strong appetite for investment had been captured in the previous survey, when nearly 40 per cent of farmers were looking to increase investment.
“This quarter, farmers’ investment intentions have eased somewhat, to 30 per cent, as most growers would not be expecting to be lucky enough to have a year that exceeded last year,” he said.
The state’s sheep producers' levels of confidence were shown to be rising with 41 per cent of sheep graziers having an optimistic view on the year ahead, while a further 52 per cent were expecting a similar year to last.
“Many sheep producers also had a decent season last year supported by above-average prices,” Mr Taylor said.
“With domestic sheep numbers relatively low and expected to be so for most of the rest of the year, prices for sheepmeat and wool should remain fairly strong.
"And with a bit of luck season-wise it should be another good year for those in the industry.”
Confidence eased in the WA beef sector this quarter, with 35 per cent of surveyed cattle producers anticipating deteriorating conditions, based primarily on their concern over drought and softening prices.
