“Most horticulturalists have fared well over the winter. Avocado and mango flowerings look promising and should progress to good fruit. Bananas are currently priced relatively favourably with prices $5 - $8 a carton above break even for most producers. The dry conditions over winter will have had a minimal impact on producers as the vast majority run irrigated operations.”

Of those North Queensland farmers surveyed who expected conditions to decline, 55 per cent nominated ‘commodity prices’ as a major contributing factor.

Despite the improvement to the global economic outlook, the performance of key agricultural commodity prices remains mixed. For example, wheat prices have declined by 30 per cent since their June 2009 peak, while at the same time sugar prices have risen sharply to above US 20 cents a pound. Notwithstanding the commodity price movements, a significant challenge for Australia’s commodity exports has been the recent strength of the Australian dollar.

Input costs are also a concern for producers with 47 per cent saying they were a contributor to their declining confidence. This result is likely to have been driven by increases in the price of oil over July, which saw the cost per barrel reach USD70. Prices for some key inputs such as fertiliser and chemicals remain at 2007/07 levels.

In terms of farmers’ own businesses, the Rabobank survey found 57 per cent of North Queensland respondents expected their farm business performances to improve over the next 12 months. This figure was well up on last quarter and significantly better than farmers’ perceptions of the future performance of the overall agricultural economy.

Consistent with the increase in headline confidence, investment intentions also improved, with 92 per cent of respondents expecting to increase or maintain their current level of investment in their farm business in the next 12 months, up from 82 per cent last quarter.

North Queensland farmers reported, on balance, higher incomes for the previous three months, with 31 per cent receiving higher incomes compared to the same period in the previous year.

The Rabobank Rural Confidence Survey also found that of those North Queensland farmers who required additional labour over the last 12 months, fourteen per cent described the experience of attracting labour as ‘impossible’. A further 42 per cent indicated that they had experienced some difficulty in attracting adequate labour (the highest of any state in Australia).

Although difficulties remain, North Queensland farm businesses are having less trouble attracting farm labour compared to two years ago (when this question was last asked), when the corresponding measures were sixteen per cent and 54 per cent.