Quarterly Rabobank analysis shows Victorian beef farmers' dropping confidence

A quarterly Rabobank Rural Confidence Survey that was recently released showed Victorian farmers, particularly beef and dairy, were less confident compared to late last year.

And a Neerim Junction farmer has just made the move from Speckle Park to Angus after his confidence in the market dropped.

Dryburgh Agriculture's Ben Whiteley, Neerim Junction, spent 10 years in the dairy industry before he moved to beef with Speckle Park cattle before settling on Angus.

Mr Whiteley said he made the move to Angus after seeing a long history of successful marketing and its benefits on cattle prices.

"For me with the move from Speckle Park to Angus there was a heap of little reasons," he said.

"We started here with 27 Speckle Parks and then I started the whole process and we got up to about 150 Speckle Parks and I didn't want to put all my eggs in one basket so I decided to go with Angus also."

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Mr Whiteley said he managed the farm with two-thirds Angus and one-third Speckle Park before seeing the different interests in the cattle market.

"I do weight gains with my cattle but they're the exact same animal, they put on the exact same weight," he said.

"I was running the farm as one so my grass management program is exactly the same with a dairying background.

"Last year I had 80 Angus steers to sell and we sold them straight to the abattoirs and I also had about 40 Speckle Park, the exact same animal but the abattoirs didn't want them."

The Rabobank analysis stated only 9 per cent of farmers believed business conditions would improve in the next 12 months, and 39pc expected conditions to worsen.

Surveyed farmers believed the economy would fall after last quarter's 17pc rise.

The survey also showed the main contributors to a confidence drop included drought, rising interest rates and labour access.

Mr Whiteley said business conditions like potential drought and input and cattle prices were "always a worry" and he found it easier to simplify his herd.

"I had 100pc more confidence in the Angus market than the Speckle," he said.

"Being farmers - you have that old saying, my dad would always hang it on me of 'it's either too wet or too dry for you farmers'.

"There's always a challenge."

Rabobank southern Victoria and Tasmania regional manager Deborah Maskell-Davies said most agricultural commodity prices were expected to "come off the highs" of the past few years.

"However, although cattle prices have backed off a significant peak, the milk price remains strong, and the quality of broadacre crops was better than many anticipated," she said.

"The situation reflects the settling of factors which influence agricultural economics in Victoria, so we're seeing a return to 'normal' conditions after a few boom years.

"Many producers have come to terms with this over the past quarter, so it is no surprise this is the main reason farmers anticipate some decline in the agricultural economy.

"Forecasts of a drier year ahead could also be weighing on some farmers' minds."

She said farmers were facing four "big levers" that included land value, seasonal conditions, commodity prices and interest rates.

"Property prices in Victoria are very high, reflecting the unfailing confidence in the industry," she said.

"However, robust land prices, when coupled with an easing of commodity prices and the production hiccup in flooded regions of Victoria, mean producers now have to service higher debt, hand-in-hand with higher interest rates, which may also have driven down confidence this quarter."