Rural confidence hits 10-year high in SA

Rural confidence hits 10-year high in SA

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SA farmer confidence is at the highest level it has bee since March 2011, with good seasonal conditions and impressive grain and livestock prices boosting optimism across the sectors.

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SA farmer confidence is at a 10-year high, with good seasonal conditions and impressive grain and livestock prices boosting optimism across the sectors.

The latest quarterly Rabobank Rural Confidence Survey, released on Tuesday, found 42 per cent of SA farmers surveyed are expecting conditions in the agricultural economy to improve in the coming year, almost doubling the 23pc who held the view last quarter.

Rabobank SA regional manager Roger Matthews said good general rains across the state from June onwards was a major reason for positivity looking ahead, as it marked a sentiment as it marked a "significant departure from the past three years where seasonal conditions have been patchy."

Of those with an optimistic outlook on the year ahead, 77pc cited seasonal conditions as the reason for their positive view - up from 31pc in the previous quarterly report, while commodity prices were also a factor underpinning the positive outlook, cited by 70pc.

A total of 52pc of surveyed primary producers are expecting to generate a higher income in 2021/22 compared with last financial year, with that figure sitting at 82pc in the grains sector.

The positivity for the grains sector has resulted in strong investment plans for the state's croppers, with 48pc planning to increase investment. Of these, 53pc are looking at property purchase to expand their enterprise - effectively one-in-four croppers overall.

"The strong appetite amongst ag businesses to expand their enterprises - underpinned by healthy balance sheets - has driven much of the upswing in property prices," Mr Matthews said.

"And it is the combination of these rapidly-appreciating land values, low interest rates, good seasonal conditions and strong - and in some cases record - commodity prices that have all aligned for the first time in many people's lifetimes."

With the wheat price still in the $300s and lentils above $1000 per tonne, it will set many up (well). - ROGER MATTHEWS

PIRSA's early-season projection of this season's crop (7.6 million tonnes), the second-biggest harvest in five years, has buoyed confidence in the grains sector, with 69pc of surveyed croppers expecting improved business conditions in the coming year, up from 19pc last quarter.

"The combination of good seasonal conditions and prices is expected to flow into good returns, particularly if spring rains deliver decent yields," Mr Matthews said.

"With the wheat price still in the $300s and lentils above $1000 per tonne, it will set many up (well)."

Mr Matthews said confidence in the sheep and beef industries was majorly driven by good prices, with 56pc of beef producers expecting business conditions to improve, compared with 46pc last quarter.

Of the sheep producers surveyed, 67pc expected a continuation of present of current conditions, while 27pc expecting an improvement.

"It is largely a price story, with record beef prices and the combination of high sheep and improving wool prices driving the positive outlook for 82pc and 88pc of beef and sheep producers, respectively," Mr Matthews said.

The next quarterly report is scheduled to be released in December.

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