![POSITIVE OUTLOOK: Callington farmer Mark Jaensch says he is feeling pretty good about the economic outlook for the coming season. POSITIVE OUTLOOK: Callington farmer Mark Jaensch says he is feeling pretty good about the economic outlook for the coming season.](/images/transform/v1/crop/frm/silverstone-agfeed/2015029.jpg/r0_0_600_398_w1200_h678_fmax.jpg)
THE economic climate is presenting the farming community with plenty of opportunities, according to National Australia Bank head of agribusiness business markets Rod Fraser.
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Speaking at the bank's agribusiness breakfast before South East Field Days last Thursday, he said that – despite some gloomy reports in the media – there were plenty of bullish signals for the economy.
"In the past 12 months I've seen demand for credit in agriculture as low as I've ever seen it," he said.
"There is money available, but people have been more cautious."
But Mr Fraser said caution might not be necessary.
"We've seen superannuation rally and we're seeing people spend more," he said.
"In the past 12 months we've seen a rally in housing prices in most capital areas, except Adelaide and Hobart.
"Overall, interest rates are still below the historic rate for three-year money.
"There's still good value on the table, and there's opportunity, but the question is for how long?"
Fixed interest rates at below 5 per cent offered "significant opportunities".
"Since 1991, we've seen three-year fixed-rate money above 5pc for 96.8pc of the time," Mr Fraser said.
"Seeing rates at the levels they're currently at, it's like seeing wheat at $600 a tonne. You don't see it often.
"I'm a big believer that agriculture should have some floating-rate debt, but I worry farmers may miss a boat here."
Many people were still holding-out for further rate cuts.
"The most common resistance of why people won't fix rates, is that they keep reading the 3pc RBA cash rate could go to 2.25pc," he said.
"People say why fix when the message is there might be one or two more cuts.
"But in the last interest rate cycle, rates moved up 0.64pc before the RBA moved on the cash rate.
"For those deciding to stick with variable rates, the opportunities are still very good. Rates are 0.7pc above the lows we saw in September last year, but they are still among the lowest rates since the 1970s."
The high $A was set to continue posing problems for producers.
"I'm often asked why the $A is overvalued, but we have been in this position before," Mr Fraser said.
"One of the issues with agricultural production has been that the international value of commodities hasn't kept pace with inflation. But we export 60pc of what we produce, so we are at the mercy of overseas markets."
*Full report in Stock Journal, March 21 issue, 2013.