Coronavirus doesn’t dent Australian farmers’ confidence following summer rain, high livestock prices
As the coronavirus pandemic spreads and global markets tumble, Australian farmers are experiencing a surge in confidence.
A survey by agri-lender Rabobank, released today, has indicated one of the largest bounces in farmer confidence in 20 years, with almost half of those surveyed expecting the farm economy to improve over the next 12 months.
Tim Hunt, head of research at Rabobank Australia and New Zealand, said recent rains and strong commodity prices had fuelled the optimism.
“(There’s) a huge sense of relief to see, of course, it does rain again, and huge excitement to be back in business, and smiles on faces as they look to the prospect of a good season ahead,” Mr Hunt said.
“What’s been particularly good is to see the breadth of that improvement in sentiment … we’ve seen confidence rise across all states and most sectors.”
Mr Hunt said the fall in the Australian dollar, relative to the US, and increased global demand for protein driven by the spread of African swine fever was helping farmers.
He said the rise in confidence had led to an increase in on-farm investment as farmers spent up on machinery, livestock and fencing.
“We still need both follow up rain to get a good winter crop away and the Coronavirus does loom as a significant downside risk for ag pricing but for now farmers are enjoying the feeling that things are finally swinging their way,” he said.
Coronavirus concern balanced by industry confidence: NFF
National Farmers’ Federation (NFF) president Fiona Simson told a meeting of the Prime Minister and state and territory premiers on Friday that the drought wasn’t over but industry was on the up.
“There has been so much optimism around the recent rain,” Ms Simson said.
“At the moment, with the widespread rains, it’s just fantastic to talk to people who know that it can rain again and are feeling so confident and buoyant about the sector.”
Ms Simson said the NFF was concerned the fallout from coronavirus could delay access to fertilisers, chemicals and foreign workers for Australian farmers.
It could also hinder exports via some overseas ports, with perishable produce most vulnerable.
“We have some concerns and some unknowns in the virus space, but it’s balanced by the positivity about producing something for which there’s a high demand and high need,” Ms Simson said.
“We know in previous economic shocks, like the global financial crisis for example, agriculture still remains strong and we expect that to continue … There’s a growing global population, people need to eat, clothe themselves” she said.
Signs point to large winter crop
Sydney-based grain trader Nick Crundall said he could see the confidence in the farm sector as farmers prepared to plant the winter crop.
Mr Crundall expected farmers priced out of the livestock market would look to plant bigger crops than normal.
“There’s a lot of guys north of Parkes and Dubbo area who in the last couple of years haven’t planted a hectare, now looking to go full capacity,” Mr Crundall said.
“The BOM is telling us that the outlook is as favourable as it has looked for the last few years … so its all lining up” he said.
But he said the results wouldn’t be known until the harvest began late in the year.
On farm feeling up
At Harden, in south-west New South Wales, farmer Tony Flanery said he had noticed an increase in optimism following recent rains.
“I guess people have just got a positive tone in their voice,” Mr Flanery said.
“It’s amazing how it can turn around from dust storms, probably the last one we had was four weeks ago and now it’s just got that lovely green look to it.”
Mr Flanery said he was “head down, bum up” hoping for more rain.
“If we get follow-up rain it will cure a lot of ills.”