RURAL and agricultural industry finance provider Rabobank has said New South Wales farmer confidence has rebounded recently after being tested early in the year.
The findings come from Rabobank’s recently released Rural Confidence Survey for the most recent three-month reporting period.
Data in the report shows rural sentiment in NSW has risen to -20 in the latest survey from -55 in the previous reporting period.
Toby Mendl, Rabobank’s NSW state manager, said numbers in the most recent report show farmer confidence is starting to rebound and “stabilise”.
“Last quarter, confidence was particularly weighed down by higher farm input cost concerns, linked to disruptions in the Strait of Hormuz, along with dry seasonal conditions in parts of the state,” he said.
In the Central West, farmer confidence was at -19, up from -47 during the previous survey.
“Across much of New South Wales the mood is now not one of concern about a major seasonal downturn, but rather a recognition that a normal spring will be important to maintain current momentum,” Mr Mendl said.
With cost concerns easing during the most recent reporting period, Mr Mendl said inputs nevertheless remained a key area of worry for many farming businesses.
“Although some costs have eased from previous peaks, ongoing global uncertainty continues to influence producer sentiment and business planning,” he said.
“Farmers are also expressing concerns about increasing regulation and infrastructure-related developments, particularly where they have the potential to affect farming operations, succession plans and long-term investment decisions.”
The second-quarter confidence rating of -55 by NSW farmers was the worst in the country at the time.
The third-quarter numbers show a levelling off of concern about global, national and local factors impacting profitability, with stabilisation rising on the back of higher commodity markets and improved income outlooks.
About half of the survey respondents said they thought overall conditions would remain the same, with 31 per cent saying they’d get worse and 10 per cent expecting things to improve.
Commodities were the biggest driver of confidence in the farming sector, with 50 per cent of farmers who took part in the survey saying they were positive about prices, and 31 per cent anticipating “a good season”.
When it came to drags on outlooks, input costs were the number one concern.
Fifty-two per cent of people who provided feedback said rising input costs were at the top of their worry list.
In second place was government red tape and policy at 40 per cent, and drought came in third.
“Sentiment has improved considerably from the lows seen earlier in the year, with many producers now looking at spring with cautious optimism,” Mr Mendl said.
“The widespread rainfall received since May has helped stabilise sentiment across much of the state, supporting both cropping and livestock enterprises and improving confidence in the outlook for the season.
“While many regions would still welcome further rainfall to finish the season strongly, producers are generally reporting conditions that are far more favourable than those anticipated earlier in the year.
“Whilst too late to plant a full program in some areas, the rainfall received in late May, helped adjust overall sentiment for the coming season, particularly for grain growers.
“This has been followed by reasonable winter rain across much of the state which has also contributed to improved farmer confidence.”