Victorian farmers started 2017 on a positive note, with four out of five expecting this year to be similar to or even better than last year, Rabobank’s quarterly Rural Confidence Survey says.
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Much of the positive outlook has been driven by renewed optimism in the dairy sector, with farm gate margins set to improve throughout 2017, Rabobank said.
Graziers were also upbeat - particularly sheep producers - with wool prices surging in recent months.
The latest survey – completed last month – found the majority of the state’s farmers were expecting the agricultural economy to remain stable in the year ahead – with 60 per cent anticipating similar conditions to last year.
Rabobank regional manager for Southern Victoria and Tasmania, Hamish McAlpin, said Victoria’s farmers were poised for a good year, particularly those in the beef and sheep sectors, while the outlook for dairy farmers had improved considerably.
“It really is the trifecta for those in the livestock game with favourable seasonal conditions, strong market prices and lower input cost pressures,” he said,
It really is the trifecta for those in the livestock game.
- Hamish McAlpine
While “all the stars hadn’t aligned” in the dairy and grain sectors, Mr McAlpin said farmers in these sectors had benefited from excellent growing conditions through the spring.
Although seasonal conditions remained a positive driver of Victorian farmer sentiment this quarter – with 30 per cent of those expecting conditions to improve citing ‘the season’ as reason for their optimism – commodity prices were the largest driver of confidence, nominated by 71 per cent.
The market outlook was particularly buoyant for those in the sheep sector, with all sheep producers citing prices as a reason for their positive outlook.
“Although lamb prices remain very strong, it is the wool market that has been the star performer in recent months, with the Eastern Market Indicator continuing to reach new highs,” Mr McAlpin said.
Dairy producers were also much more positive about their market outlook.
This season’s closing price was expected to be better than what was anticipated at the start of the season, though for many it was still below break-even, he said.
However, Mr McAlpine said the sector should start to return to profitability next season with higher returns from dairy exports, favorable seasonal conditions, more home-grown feed and more affordable purchased feed.
