A new report suggests Tasmanian farmers are still feeling positive about the next 12 months, though higher input costs have dampened the previous optimism of many of the state's producers.
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In a recent quarterly survey conducted by the agricultural arm of financial services company Rabobank, close to two-thirds of the state's farmers were still expecting high commodity prices and "excellent seasonal conditions" to continue over the next year.
Commodity prices have remained elevated across the board since the onset of the pandemic. However, the pandemic also triggered a significant rise in the cost of key agricultural 'inputs', such as fertiliser, chemicals and freight. Those input costs have risen further in recent months, following steep rises in the cost of fuel - which is in turn having a knock-on effect to transport costs - as well as a rise in power prices.
It should also be noted the survey was conducted before the Reserve Bank of Australia raised the cash rate last week as well as the recent bout of poor weather.
While the survey found Tasmanian farmers remained "buoyant"in their outlook, it also noted a drop compared to previous quarters, when the state's sector was considered the most confident in the country.
About 20 per cent of Tasmanian farmers who participated in the most recent survey thought business conditions would improve over the coming 12 months, compared with 40 per cent at the start of the year.
Despite the drop, Rabobank area manager for Tasmania Stuart Whatling said there was still a lot of positivity around agricultural commodity prices.
"I think any reduction in optimism about conditions improving over the year ahead is more a sign that there's an expectation among farmers that the current conditions will continue, rather than any negativity or view that things are getting worse," he said.
"Conditions are still very good, and good prices are still coming through for most commodities. But farmers are going to need those high prices if faced with these significantly higher costs."
Mr Whatling noted prices for dairy, in particular, were very strong.
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