SA farmers are in general finishing the year with a more cautious outlook, the latest quarterly Rabobank Rural Confidence Survey has found.
Released today, the survey found SA rural sentiment had softened significantly in the past three months, after leaping to a 10-year-high last quarter.
Overall, 26 per cent of SA farmers are expecting business conditions to improve in the coming year, down from 42pc last quarter, 54pc are expecting little change, and 15pc are forecasting conditions to decline, compared to 2pc who held that view three months ago.
The softening confidence was particularly evident among graingrowers. Of the graingrowers surveyed, only 26pc had an optimistic outlook, down from 69pc holding that view last quarter. In addition, 42pc of those in the grain sector are expecting business conditions to worsen in the coming year.
Rabobank SA regional manager Roger Matthews said reduced confidence in the latest survey was understandable following disappointing rainfall tallies in early spring. with rain having disappointed in parts of the state during spring.
"We saw good winter rainfall across much of SA and then missed out on September and October rain, with the recent rainfalls in November being generally too late to help graingrowers," he said.
Region by region, Mr Matthews said just 9pc of farmers on the Eyre Peninsula were expecting conditions to improve - down from 53pc with that view in September - while confidence on the YP was more stable, with 43pc of the region's farmers expecting improving conditions.
Looking specifically at livestock producers, the survey revealed 33pc of beef producers and 26pc of sheep producers were expecting conditions to improve, while 67pc and 58pc expected similar conditions, respectively.
Mr Matthews said conditions were "great" for SA sheep producers, with both meat and fine and superfine wool markets performing exceptionally well.
"Relatively good recent rains in northern pastoral areas will support good weight gains for beef producers. The season is continuing in the South East, which is very positive for livestock producers," he said.
Estimations of gross farm incomes were also downgraded by many SA farmers, with 39pc per cent expecting a higher income in the coming year, compared to 52pc who held that view for 2022, in the previous survey. The percentage expecting their incomes to fall was 19pc.
Mr Matthews said a key challenge overhanging the otherwise generally positive outlook for the state's ag sector was rising input costs and the ability to access inputs such as pesticides.
"But any concerns around the availability of inputs have done little to dampen investment plans in the sector," he said.
Overall sentiment and long-term confidence still remains at relatively high levels, with 31pc of SA farmers intending to increase investment in their farm businesses in 2022, while 64pc are planning to maintain investment at present current levels.
Out of the farmers looking to increase investment, 78pc plan to spend on on-farm infrastructure including fences, yards and silos, 58pc are intending to invest in new plant/machinery, 49pc are looking at adopting new technologies and 41pc plan to build livestock numbers.
Commodity prices were shown to be the biggest driver of positive sentiment among SA farmers this survey, with this reason nominated by 83pc of those expecting conditions to improve. Just 29pc cited seasonal conditions as a cause for optimism, down from 77pc three months ago.
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