Farmer confidence high

Rural confidence survey finds Victorian farmers optimistic

OPTIMISM: Victorian Farmers Federation grains group councillor Ryan Milgate says Wimmera growers have enjoyed summer rainfall and booming land prices. Photo by Gregor Heard.

OPTIMISM: Victorian Farmers Federation grains group councillor Ryan Milgate says Wimmera growers have enjoyed summer rainfall and booming land prices. Photo by Gregor Heard.


Victorian farmers feeling positive, the latest Rabobank survey finds.


Victorian farmers are optimistic about the year ahead thanks to the combination of commodity prices and seasonal conditions, the latest quarterly Rabobank Rural Confidence Survey has found.

While confidence among Victorian grain growers had dipped slightly since the December report, 34 per cent were still expecting better business conditions in the year ahead, while 60pc expected another year like 2020.

Victorian Farmers Federation grains group councillor Ryan Milgate farms predominantly wheat, barley and lentils near Minyip in the Wimmera.

Mr Milgate had come off the back of an above-average year and reported some summer rain.

He said farms about 10 kilometres away had received significant totals of more than 100 millimetres.

"We've had two good years in a row and a bit of summer rain," he said.

"There's a bit of confidence there - early, measured confidence."

He pointed to the booming land prices in the Wimmera as another example of confidence in the industry.

"There was more land sold probably 50 kilometres south of me on Friday down at Marnoo and I think he paid $6300 an acre," he said.

"I reckon five years ago you probably would have got it for less than $2000, comfortably.

"For people to pay high prices at an auction there's obviously someone else bidding - there's obviously plenty of demand.

"Interest rates are low, confidence is reasonably high, and then I honestly think in amongst it all is just a little bit of hype or something.

"Everyone's talking the market up and people sort of get wound up in the whole thing."

He said China's dispute over barley tariffs had not played out as badly as first expected, and India's tariffs on lentils had still brought good returns.

"I suppose a lot of people are probably thinking, 'a lot of this stuff hasn't come out as bad as we first thought'," he said.

"We got through COVID-19... things haven't been that bad."

He said there were still some concerns for growers going forward, including the situation over barley tariffs.

"Seed grains in general, there's huge supply up the east coast this year and just how it's going to play out in the medium term will be interesting," he said.

"It's really hard to know what's around the corner but the pulse job's reasonably good, wheat's sort of just been keeping on.

"If things all stay somewhere about where they are now I think most people would be reasonably comfortable."

The survey found the state's dairy farmers were the most optimistic, with 35pc expecting business conditions to improve in the year ahead and 54pc expecting them to remain the same.

It also found 37pc of dairy farmers were expecting a higher gross farm income.

But sourcing staff remains a concern for some farmers, despite the positivity in the survey.

Nerrena dairy farmer Simon Greaves said he had nearly two year's supply of hay and silage in storage and had not been affected at all by COVID-19.

"I think milk prices have to come up," Mr Greaves said.

"Whether it does what beef and sheep have done I'm not sure - I don't see why it shouldn't.

"The other industries have had massive rises so why can't dairy?"

But he said sourcing staff remained one of the biggest challenges for the industry and in many cases would overshadow the optimism around milk prices.

"It's almost a disaster, it's getting to the write-off point," he said.

"Maybe if the milk price increases they can pass that one to staff and attract better people, I'm not sure.

"Your family farms when everyone's got skin in the game, they're the ones that are going to be in a good position going forward."

He pointed to the trend of dairy farmers in Gippsland leaving the industry, with many turning instead to beef.

"No matter how high the milk price is, if you want to grow your business you can't grow it without good staff," he said.

"Even if the milk price did lift 20pc, I still don't think there will be any new people coming into the dairy industry."

Rabobank Southern Victoria regional manager Deborah Maskell-Davies said a number of processors had recently stepped up their milk prices in response to improving global conditions.

Ms Maskell-Davies said this was supported by significant on-farm feed buffers.

The survey found dairy producers were particularly buoyed by the commodity price outlook, with 86pc of those expecting conditions to improve citing the market as a key reason for their positive outlook.

Property expansion was also flagged by more than half the respondents in the sector.

She said additional property was one of the main investments being seen on the ground, while new milking sheds and dairy barns were also a key focus in Victoria.

Confidence was also sound in the beef and sheep sectors.

The survey found 33pc of beef producers and 29pc in the sheep sector were expecting improved business conditions, and more than half of the producers surveyed in both sectors were expecting last year's good conditions to continue.

Prices were the driving factor among the 79pc of sheep producers expecting conditions to improve.

Ms Maskell-Davies said beef sector confidence was solid, largely underpinned by the strong demand for cattle which had fueled historically high prices.

January bull sale results broke records and pointed to significant long-term confidence in the sector.

She said confidence in the sheep sector was strengthened by similar robust pricing and strong demand, influenced by restocking across the eastern states.

She said the wool market was showing signs of increasing confidence as prices lifted in the new year.


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