13 December 2004 - 4th Quarter 2004
Results at a Glance:
- Rural confidence has eased in North Queensland, but remains relatively strong.
- Sentiment remains strong among sugar producers.
- Investment intentions are relatively stable.
- Income expectations have declined.
Rural confidence has eased slightly in North Queensland, but remains significantly higher than the national average, according to the latest results of the Rabobank Rural Confidence Survey.
The survey shows 40 per cent of North Queensland primary producers expect an improvement in the agricultural economy during the next year, down slightly from 42 per cent last quarter. And slightly more farmers expect conditions to worsen in the next 12 months with the figure at 21 per cent this survey, compared with 16 per cent in the previous quarter.
Rabobank regional manager for North Queensland Peter Ciranni said the relative stability in confidence was positive.
The increase in sugar production combined with the relatively strong international sugar prices have underpinned the strong sentiment in the sector. However, the price falls during the last month are a reminder that international sugar prices are notoriously volatile, Mr Ciranni added.
"Prices are still a long way short of providing satisfactory returns for many farmers, and high input prices are increasingly having a negative impact on farm confidence," Mr Ciranni said.
Confidence is relatively stable among beef producers despite the comparatively poor seasonal outlook in many areas. The continued strength in beef prices has provided support for sentiment in the sector.
The Rabobank survey also found North Queensland farmers' investment intentions were stable, with 30 per cent planning to invest more in their business during the year, compared with 29 per cent in the last quarter.
Income expectations eased in the last survey period, but remain relatively strong - 45 per cent of North Queensland primary producers expecting higher incomes in the next 12 months, down from 62 per cent last quarter. However, fewer respondents expected lower incomes in the latest survey - a total of 10 per cent, down significantly from 14 per cent last quarter.
The most pressing factor impacting on farm businesses in North Queensland is the seasonal outlook, mentioned by 46 per cent of respondents - unchanged since last year. The other important issues are higher input costs - 25 per cent and low commodity prices - 25 per cent.
The Rabobank Rural Confidence Survey is a quarterly monitor of outlook and sentiment in Australian rural industries. The only study of its type in Australia, it is conducted by an independent research organisation interviewing a panel of more than 2100 farmers throughout the country. The next results will be released in March 2005.
Rabobank Australia is a part of the international Rabobank Group, the world's leading specialist in food and agribusiness banking. Rabobank has more than 100 years' experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank has a AAA credit rating and, in recent years, has twice been awarded the title of the world's safest bank by Global Finance magazine. The bank operates in 35 countries, servicing the needs of more than nine million clients worldwide through a network of more than 1900 offices and branches.
Rabobank Australia is one of Australia's leading rural lenders and a significant provider of business and corporate banking and financial services to the Australian food and agribusiness sector. The bank has 46 branches throughout Australia.
Contact
For further information about the Rural Confidence Survey, please contact Denise Shaw, Public Relations Manager (Tel: +61 2 8233 8744) or email on sydney.confidence.survey@rabobank.com.