DESPITE a good start to the season for large parts of the state, COVID-19 is still creating uncertainty for SA farmers, according to the latest Rabobank Rural Confidence Survey.
There are promising outlooks for the season, and beef and sheepmeat prices remain firm, but concerns about global economies has emerged as a key driver of a decline in confidence.
The latest quarterly survey revealed 19 per cent of surveyed farmers in the state expected agricultural economic conditions to worsen, up from just 7pc last quarter, and back in line with similar levels reported a year ago.
The survey, released today, found 86pc of those SA farmers expecting conditions to worsen cited global market factors as their main concern, up significantly from just 27pc who had market concerns last quarter.
Commodity price volatility was also front-of-mind, with 47pc - up from 17pc last quarter - identifying this as a key concern.
But the news was not all bad with almost a quarter of the state's farmers (24pc) still held an optimistic outlook on the coming 12 months - albeit down from 44pc last quarter - while those expecting conditions to remain similar to last year remained firm at 46pc.
Optimism has mainly been driven by the good seasonal outlook.
Rabobank SA regional manager Roger Matthews said the survey results reflected the impact of general concerns and uncertainty surrounding COVID-19, despite positive seasonal factors and the strength of the agricultural industry during the turmoil.
"Farmers are experts at social isolation, and rain early in the season alleviated any production concerns, yet it seems the pervading sentiment within the general community around COVID-19, and the resulting uncertainty weighed over them during the survey," Mr Matthews said.
Specifically questioned in this survey about the impact of COVID-19, 54pc of the state's farmers believed it had negatively impacted their business, while 40pc said the pandemic had no bearing on operations.
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Sheep producers emerged as the most affected by the impacts of the coronavirus pandemic, with 49pc attributing it to the significant decrease in wool prices.
Only 15pc of the state's sheep farmers expecting conditions to improve in the latest survey - down from 34pc earlier in the year - and Mr Matthews said the declining Australian wool market had many local producers worried.
"The decreased demand for textiles, such as wool, during the current economic global downturn has been one of the largest repercussions for farmers on the ground, with the sheep and wool complex a major component of SA's industry," he said.
Grain producers also reported decreased optimism despite a seasonal uplift, with only 21pc of the state's graingrowers expecting conditions to improve - well down on the 41pc with that view last quarter.
Mr Matthews said this easing of sentiment among the state's grain producers may have been influenced by the view that business and growing conditions are already at favourable levels, therefore capacity to improve further may be limited in some growers' minds.
"Overall South Australian croppers have enjoyed their best planting conditions in recent years, with rainfall in the Mallee, year to date, greater than last year's total," Mr Matthews said.
While parts of the Eyre Peninsula remained dry, he said, there was confidence the seasonal pattern had changed, and it was commodity prices, and recent tariffs imposed on Australian barley exports to China, which were the key drivers for the downturn in sentiment.
"Barley is a key component in SA's rotation for grain growers," Mr Matthews said.
"While the survey was conducted just prior to the announcement, the speculation surrounding the tariffs was considerable and many farmers would have factored this into their planting decisions accordingly."
Confidence in the beef sector also fell, yet remained comparatively strong, with 32pc of South Australian cattle producers expecting conditions to improve - down from 58pc last quarter.
Mr Matthews said the seasonal break had supported strong restocking competition, pushing cattle prices to record or near-record levels early in the year, and that while the cattle market was easing, cattle prices - and likewise sheep meat prices, which had also softened slightly - would remain buoyant.
In line with overall confidence levels, farmers revised down their own gross income projections considerably for the next 12 months, but confidence in their operations was strong, with 94pc of South Australian farmers continuing to report business viability.
Mr Matthews said this was reflected in investment intentions across the state, with 21pc of farmers planning to increase spending on on-farm infrastructure and new machinery.
"This really does show how robust our rural sector is amidst rising market tension and complex global headwinds. Our Australian farmers are still enjoying extremely healthy farm viability, and planning for the future," he said.
The survey questions an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia each quarter and has been conducted since 2000.
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