Most recent Rabobank survey shows decrease in Victorian farmer confidence

The survey, released on Wednesday, found only 13 per cent of Victoria's farmers expect business conditions to improve in the coming 12 months, which was unchanged from last quarter.

The survey also showed 52pc farmers anticipate worsening conditions, up from 44pc from the previous quarterly survey.

Rabobank southern Victoria and Tasmania regional manager Deborah Maskell-Davies said farmers were doing it tough, "particularly for livestock producers who have been dealing with depressed markets."

"And the early predictions of potentially drier seasonal conditions have also impacted on farmer confidence levels, when, in reality, many parts of the state have enjoyed a good to average season," she said.

Ms Maskell-Davies said most of Gippsland was dry through winter and spring, which would have impacted local farmers' confidence levels.

"Victoria's sheep and beef producers have had a tough year trying to keep their costs of production under control, while receiving reduced prices for their stock," she said

The survey showed Victorian sheep producers were the most pessimistic of all the state's farmers in this quarter, with 67pc anticipating agribusiness conditions to worsen in the year ahead, up from 61pc.

Ms Maskell-Davies said 2023 has been a tough year for those in the state's sheep sector.

"Sheep producers have had to cope with strong supply in the market, which has significantly reduced the price of their lambs," she said.

"The saleyard price of Victorian trade lambs dropped 42pc in the 12 months to the beginning of October."

Sheep farmer Daryl Hunt, Mount Doran, agreed that it had been drier than usual through winter and spring, but recent rains meant a "quite positive" outlook ahead.

"Sheep and lamb markets have improved a bit because of that, so I think that's made me look on the bright side of things," he said.

He said he was concerned particularly for those selling lamb and older sheep.

"Prices were pretty flat for lambs and older sheep as well," he said.

"That put a bit of a downward slant on an overall scheme of prices, but things have improved on both those lamb and sheep sectors, so I'm optimistic.

"Wool prices have improved a bit too, which I think is an added bonus."

In the beef sector, Ms Maskell-Davies said producers hope they have already hit the bottom of the market.

"The November rain across northern NSW and Queensland has had the knock-on impact of seeing Victorian saleyard restocker steer prices jump 36 per cent since the beginning of October," she said.

The survey found Victorian grain growers to be the most optimistic sector in the state, with 64pc expecting economic conditions to improve or remain the same in the next 12 months.

"We have been hearing reports of good crops being harvested across the state, however, the impact of some significant rainfalls in late November is likely to create some grain quality issues," Ms Maskell-Davies said.

Overall, this quarter, investment appetite was lower among Victorian farmers.

Only 11pc of those surveyed expect to increase investment in their farming business, down from 13pc last quarter, and 35pc survey respondents were now looking to decrease investment levels up from 21pc.

Of those farmers in the state planning to increase their farm business investment, there was a significant decrease in those who wanted to spend on farm infrastructure like fences, yards and silos this quarter (49pc, down from 78pc previously).

Despite the lower confidence in Victoria, net level farmer confidence across the nation edged up marginally, after having dropped to the fourth lowest level in the survey's history in the previous quarter.

Sentiment had been mixed across the states, with Western Australia and Tasmania reporting lower farmer confidence levels along with Victoria.

An improved outlook was reported by primary producers in New South Wales, South Australia and Queensland.