RECORD wet conditions across Tasmania during spring have failed to dampen farmer confidence.
The latest Rabobank Rural Confidence Survey shows 59 per cent of Tasmanian farmers had a stable outlook on the year ahead.
There was also a slight lift in the number of farmers expecting improved conditions, up from nine per cent last quarter to 12 per cent this time around.
The number of producers with a pessimistic outlook also fell slightly, from 32 per cent last quarter to 27 per cent now.
Rabobank Tasmania area manager Stuart Whatling said the main reasons farmers in the state expected business conditions to improve were strong commodity prices, overseas markets and good seasonal conditions.
However, the season has not been without short-term challenges, with 40 per cent of the state’s farmers who expected the agricultural economy to worsen citing too much rain as the reason.
“With the exception of isolated pockets, Tasmanian farmers have dodged the recent flooding experienced in other states, instead facing widespread saturation,” Mr Whatling said.
“Usually by now most irrigated systems would be operating, but hardly anyone has turned on the water yet.”
The wet conditions have driven delays in planting crops – such as peas, poppies and potatoes – with many growers making the call to not plant these at all.
“This is where the diverse nature of Tasmanian agricultural businesses comes into play,” Mr Whatling said.
“Most farmers have in-built flexibility in their systems to adapt and divert areas earmarked for these crops to another option, such as finishing livestock.”
The saturated conditions have also negatively impacted silage production across Tasmania, with rain delays contributing to downgraded quality.
“Most silage is retained for on-farm use in the dairy industry, so this will have knock-on effects for feed costs as farmers purchase additional supplemented feed,” Mr Whatling said.
Although there was some concern that commodity prices would drop, Mr Whatling said this should be considered against the backdrop of ongoing strong commodity prices.
“We see this as a plateauing of sentiment,” he said.
“We’ve seen some commodity prices come off a bit and there’s the expectations things will flatten out a bit from here, so this is really a slight reduction from a very high place,” he said.
“Those farmers who were successful in getting cash crops into the ground are anticipating reasonably strong prices on the back of supply issues caused by flooding in other states.”
Rabobank Southern Victoria and Tasmania regional manager Deborah Maskell-Davies noted that although dairy sector confidence declined both nationally and locally this survey, Tasmanian dairy farmers had avoided the ramifications of flooding experienced in other states.
“While farmers are acutely aware of rising costs and availability of labour, generally those in the dairy industry are quite buoyant on the back of three years good prices and stable outlook going forward,” she said.
There is also a strong appetite for investment among Tasmanian farmers with 31 per cent now looking to increase their total farm investment over the next 12 months, up from 29 per cent last quarter and 61 per cent expecting their level of investment to stay the same (64 per cent last quarter).
Tasmanian farmers listed on-farm infrastructure, irrigation and water infrastructure and increasing livestock numbers as the top three areas they intended to increase investment in over the next 12 months.
Mr Whatling said investment intention remains strong, underpinned by the availability of water and the continuing roll-out of Tasmanian irrigation schemes.
“Many farmers are also investing in on-farm water storage projects to mitigate climate risk,” he said.
“The ongoing uptake of the Australian government’s instant asset write-off scheme and a strong focus on labour-saving infrastructure has also been contributing to on-farm investments.”
Mr Whatling said while the previous quarter’s survey delivered a spike in concerns about livestock disease, this dropped away in the latest survey with no Tasmanian producers citing foot and mouth disease as a concern.
“Tasmanian farmers remain mindful of the threat but aren’t letting it get in the way of strategic medium- to long-term investment decisions for their business,” he said.
Looking ahead, he said, while La Nina tends to throw continued wet weather at the east coast of Tasmania, farmers in the west of the state are anticipating drier conditions for the second year in a row.
“Fortunately, the wetter spring this year for the western regions will provide a buffer coming into summer with a full moisture profile,” he said.