6 December 2005

Results at a Glance:

• Rural confidence has declined in Tasmania.
• Investment intentions have declined.
• Income expectations are relatively stable.

Rural confidence among Tasmania's primary producers has declined in the last quarter, according to the latest quarterly Rabobank Rural Confidence Survey.

The survey shows 25 per cent of Tasmanian farmers expect the agricultural economy to improve in the next 12 months, down from 32 per cent last quarter. However, 38 per cent now expect conditions to worsen during that period, compared with 32 per cent last quarter.

Rabobank senior manager for Tasmania, David Young said confidence continues to be volatile as producers react to the increase in input prices and to difficulties with crop planting.

"The uncertain price outlook for horticultural crops and the continued weakness in wool prices are also affecting confidence in the state," Mr Young said.

A total of 91 per cent of Tasmanian farmers expect input prices to continue to rise over the next 12 months.

Fortunes have generally progressed for the state's dairy farmers, with the improvement in milk prices and excellent pasture growth heading them towards a very profitable season.

While investment intentions have declined this quarter, they continue to be more stable than headline confidence indicating a solid level of underlying confidence. Of the farmers surveyed, 36 per cent expect to invest more in their business in the next 12 months, up from 32 per cent last quarter.

Income expectations also continue to be relatively stable with 37 per cent of farmers expecting their incomes to increase in the next 12 months, compared with 33 per cent last quarter. However, more farmers expect their income to decline - 33 per cent compared to 23 per cent last quarter.

"Encouragingly, farmers in Tasmania also continue to be more confident about their long-term prospects than farmers in other parts of Australia. A total of 58 per cent rated their operations easily viable or viable, compared to the national average of 47 per cent," Mr Young said.

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 2000 farmers throughout the country. The next results will be released in March 2006.

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.