Rabobank says heightened concerns over drought conditions have driven farmer confidence to a five-year low, with 75% of farmers now holding a pessimistic outlook.
The three-quarters of farmers now reporting a negative outlook is up massively from the 36% who were negative in the March 2018 survey.
Rabobank says grain growers are particularly worried about the weather, with the biggest drop in sentiment in the survey, and a below-average winter crop now firmly on the cards.
“The majority of New South Wales is now in the grip of drought, with 63% of the state in drought or drought onset, and the balance largely in drought watch, according to the DPI Combined Drought Indicator,” Rabobank Australia chief executive Peter Knoblanche said.
“Meanwhile large swathes of Queensland have been drought-declared since early 2013, with 57.4% of the state remaining in drought.”
Knoblanche said high commodity prices had kept confidence high in recent quarters, but the ongoing nature of the drought had turned the tide quickly.
Farmers continue to persevere, however.
“The resilience of farm businesses in this tough season is evident,” he said, “with the survey showing strong viability, and at levels higher than in previous dry periods. Farmers are also continuing to invest to increase business resilience with rising intentions to invest in on-farm infrastructure, including water and irrigation, and adoption of new technologies.”
The survey follows a report from agribusiness Viterra, which said on June 7 an increasing number of its growers were accessing warehoused grain to feed livestock as dry conditions continue.
“It has been a very dry start to the year in the northern cropping areas and a number of growers also run sheep,” Viterra’s group operations manager Michael Hill said.
“We are accommodating any size outturn, but most are individual truck loads as growers wait for the season to break.