According to Rabobank, mood among Australian farmers has reached its lowest point in more than four years as a result of falling commodity prices, rising borrowing rates, and worries about a drought returning.
Just 11% of farmers, compared to 15% in the previous quarter, expect the agricultural sector to grow over the next year, according to the agribank’s Rural Confidence Survey.
The most recent low point was in late 2018.
Only Western Australia and Tasmania reported an improvement in sentiment, bucking the general trend.
Moreover, sentiment varied among the various commodities sectors. The most gloomy farmers were those of beef and dairy products.
A third of all farmers surveyed expect business conditions to worsen in the next 12 months, while half of them say it will be business as usual.
The main cause of the pessimism is the decline in commodity prices, with 68% of respondents anticipating a worsening of the situation.
One in five farmers are also becoming more anxious about interest rates.
Farmers are also concerned about the weather, with 13% of farmers worrying about drought and only 6% worried about too much rain, a decrease from 32% to 6%.
According to Peter Knoblanche, chief executive officer of Rabobank Australia, the most recent poll showed that agricultural businesses are struggling due to high production costs, fluctuating commodity prices, and problems with the global economy.
Despite having their resiliency put to the test throughout 2022, most Australian farmers concluded last year on a high, helped by favorable seasonal weather and high commodity prices, Mr. Knoblanche said.
Farmers, he said, “recognize conditions will start to revert to more ‘normal’ levels as we see the heat come off numerous commodities, albeit down from major highs.
This survey “captures their reasonable views that commodities prices will probably not return to the highs that we saw in the prior 12 months this year,” according to the study.
According to official data, Australian agriculture is expected to produce goods worth a record $90 billion in 2022–2023.
However, that is anticipated to decrease by 10% to $81 billion for 2023–2024.