Confidence has held steady among Victoria’s farmers, bucking the national trend which has seen a significant overall decline in Australian rural confidence as many parts of the country battle ongoing dry conditions.
The latest Rabobank Rural Confidence Survey found confidence had improved markedly in Victoria’s dairy sector, that the state’s grain and sheep producers were the most positive about their prospects but optimism was well down in beef.
Rabobank regional manager for Southern Victoria and Tasmania Hamish McAlpin said nearly two thirds of sheep producers surveyed expected the good conditions for their industry to remain comparatively unchanged.
But in the beef sector it was a different story, with 49 per cent expecting economic conditions to deteriorate.
“While the season has been tough for graziers, with many feeding and offloading older classes of stock, record wool and high lamb and mutton prices are providing the incentive to feed sheep,” Mr McAlpin said.
“But in beef, cattle prices haven’t held up as well, although they are still above long-term averages,” Mr McAlpin said.
The survey found the state’s dairy farmers posted the largest upswing in confidence, with 20 per cent expecting improving economic conditions in the coming year and 54 per cent expecting stable conditions.
“A full-season milk price well and truly in the ‘six dollars’ is potentially on the cards with a number of dairy companies releasing opening prices between $5.60 and $6 per kilogram of milk solids and the market eagerly awaiting Saputo,” Mr McAlpin said.
“As a starting line, these prices should deliver pretty good margins, particularly if we have an average or normal spring,” he said.
Mr McAlpin said with a fair bit of movement continuing between processors, domestic competition for milk remained strong and was helping underpin prices.
“The recent sell down of Murray Goulburn shares has also given those dairy farmers a short-term cashflow boost for debt repayment or capital reinvestment,” he said.
But the dry conditions in many other parts of eastern Australia have put pressure on south-west farmers hit by the St Patrick’s Day fires.
The dry conditions elsewhere have increased demand and prices for hay and other fodder needed by south-west farmers still trying to renew pastures burnt out in the March 17 fires.
Graham Cockerell from Need for Feed said it was still receiving requests from south-west farmers for feed and more donations were needed.