SOUTH Australia’s livestock producers are expected to invest strongly to expand their production in the coming 12 months, according to surveys from two leading banks.
Rabobank’s quarterly Rural Confidence Survey, released today, shows sheep, beef and dairy farmers are leading a lift in sentiment.
Of the SA farmers surveyed last month, only 19 per cent expected conditions in the agricultural economy to worsen in the coming 12 months, compared to 35pc the previous quarter.
But dry seasonal conditions continue to be a concern for many farmers, especially on the Eyre Peninsula where 30 per cent of farmers are still expecting conditions to deteriorate and the Yorke Peninsula
In the SE which has seen a reversal of fortunes with 23pc of farmers feeling confident about the coming 12 months and just 7pc expecting conditions to worsen.
Rabobank regional manager for SA Roger Matthews said the rainfall received in the state in August and September had been valuable for a lot of farmers, but was either insufficient or too late for some.
“The EP had a terribly dry start to planting and we’re seeing tonnes from that region come in well below averages,” he said.
“For areas around the YP, the Adelaide Plains and the Mid North, the season has been fairly patchy, but then for areas such as the South East around Mt Gambier they’ve had a great year.”
In line with the improvement in overall confidence, income projections also improved among SA farmers and were strongest in the dairy and the sheep sectors.
For sheep producers, 41pc were expecting higher incomes in the coming 12 months, with a further 49 per cent expecting them to remain similar to the previous year.
Mr Matthews said livestock producers’ consistently solid incomes were driving competition for pastoral country in the state.
“We’re seeing a real escalation in activity for grazing properties and producers have been paying record prices across the board,” he said.
“From the pastoral zones of the far-west through to the high-rainfall areas, confidence in livestock is being played out in competitive bidding right across the state.”
Livestock producers were ‘bullish” about expansion with 93pc of beef producers and 90pc of sheep producers intending to maintain or grow their investment this year – compared to the state average of 86pc.
The recent Commonwealth Bank AgriInsights shows a similar story with 31 per cent of lamb producers across the country hoping to expand their production, along with 24pc of beef producers and 33pc of woolgrowers.
Commonwealth Bank general manager regional and agribusiness banking for SA, Natasha Greenwood, says demand for livestock properties is high.
“Significant interest being shown in some of the quality properties coming onto the market,” she said.
At the same time, only 13pc of grain growers nationwide say they will increase their enterprise while 20pc say they will reduce it.
“Cropping margins require tight management and those who are not in a position to diversify are looking for other ways to manage both yields and pricing expectations,” she said.
The bank’s research also found more than one quarter of SA farmers (27pc) say they will increase investment in technology and innovation,
“While yields this year will be mixed across the state, the overall picture is good for SA, with continuing strong investment intentions in technology, infrastructure and education,” Ms Greenwood said.