SA farmers start year on positive footing

SA farmers start year on positive footing

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The latest Rabobank Rural Confidence Survey has found SA's rural sector has improved positivity, rising from last year's 12-year low.

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The latest Rabobank Rural Confidence Survey has found SA's rural sector has improved positivity, rising from last year's 12-year low.

The survey found 55 per cent of farmers with a positive outlook cited anticipation of better seasonal conditions as the main driver. 

While graingrowers held the highest income expectations, with 44pc anticipating improved cash flow this year.

SA farmers' investment appetite was also found to be at a three-year high, while a positive attitude was revealed because of expectation of an improved season ahead and strong commodity prices. 

The percentage of the state’s farmers with a negative outlook on prospects for the agricultural economy in the year ahead had halved to 22pc, from 45pc last quarter, while those expecting conditions to improve held relatively steady at 27pc, previously 31pc. 

But almost half of those surveyed, 47pc, said they anticipated similar conditions to last year.

Rabobank SA regional manager Roger Matthews said while the 2018/19 season had been patchy for the state, graingrowers who had decent yields would have been buoyed by the solid grain prices.

He said solid grain prices had been the main positive for the state’s graingrowers, who had experienced a mixed season. 

“In some regions, such as the lower Eyre Peninsula and the South East, we saw yields at average, and perhaps even better than average. However, for much of the rest of the state, the growing season was patchy and yields, while at times surprising, were still well below averages,” Mr Matthews said. 

“For the state we saw 5.3 million tonnes total crop, which, while better than expected, is almost half what we received a couple of years ago," he said. 

“On the price front though, with wheat stocks at their lowest in 10 years, it is expected that prices will remain above average throughout 2019 until new crop starts coming in toward the end of the year.”

Rising commodity prices were another significant factor behind the upswing in positivity, with prices nominated by 43pc of those who were expecting an improved year ahead.

Mr Matthews said the ongoing dry conditions in eastern Australia were supporting higher prices in grains and livestock.

“The significant dry conditions seen in much of the east coast has meant the continuance of low feed stocks and greatly reduced sheep and beef herds,” he said.

Confidence in SA's beef sector also improved but the survey showed there were still more beef producers expecting conditions to worsen, rather than improve, with concerns about drought and falling prices highlighted as their biggest concerns.

Mr Matthews said dry conditions were also keeping sheep supplies low and propping up prices domestically despite some softening in global price drivers. 

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