Buoyed by wool and dairy prices and rain, Tasmanian farmers have surged in confidence to hit an 18-month high, the latest Rabobank Rural Confidence Survey found.
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On the flip side, farmers in mainland Australia are posting increasingly pessimistic views about the year ahead.
Tasmanian farmers’ confidence extends to investment plans, with almost a quarter (24 per cent) indicating they would increase investment in the next year, against a national average of 19 per cent.
Rabobank branch manager Tasmania Kathryn Brown said the state had recorded favourable seasonal conditions and the price outlook for major commodities looked good.
“The rain event in early May, whilst damaging around Mount Wellington and greater Hobart, did only good things for our rural sector,” Ms Brown said.
“The rain came late enough that most of the crops, such as apples and wine grapes, were off and there have not been reports of adverse impact on the potato crop.”
Last month’s rain of between 70 and 100 millimetres in 24 hours alleviated dry conditions on the East Coast, with soil temperatures still warm enough for the moisture to stimulate growth.
Commodity prices are buoyant, with all sectors reporting positive sentiment, Ms Brown said.
Of those Tasmanian farmers expecting economic conditions to improve, 81 per cent cited commodity prices as reason for their optimism.
This figure is up from 53 per cent in the previous survey, with price outlooks a strong sentiment driver for sheep and dairy producers.
“The wool price is now at record levels, with the Eastern Market Indicator breaking through 2000 cents per kilogram.”
“Dairy farmers have come through a hard time and a lot of uncertainty with the recent sale of Murray Goulburn, but the sell down has given those dairy farmers a short-term cashflow injection to invest in their business or repay debt,” Ms Brown said.
Rabobank questions around 1000 primary producers throughout Australia each quarter for the Rural Confidence Survey.
The next results will be released in September.