Business confidence among NSW farmers continues to soar at historically high levels, overshadowing concerns about the impact of COVID-19 on agricultural markets, according to the latest Rabobank Rural Confidence Survey.
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A break in the drought has trumped market and trade uncertainty, with significant autumn rainfall helping fire up farm production, particularly in the grains sector, following successive years of low or no rainfall.
NSW was the only state to report an upswing in confidence this quarter - bucking the national trend - with the impacts of COVID-19 contributing to a fall in confidence in all other states.
While the survey was taken in the midst of the coronavirus uncertainty, the fallout from the pandemic was not shown to have had any significant influence on overall rural confidence in NSW. This is despite more than half of the farmers surveyed conceding COVID-19 or related restrictions had negatively impacted their business in some way.
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To the contrary, more than half of the state's farmers expect conditions to improve in the next 12 months (52 per cent, up from 48 per cent last quarter) with confidence strong across most regions and all commodity sectors.
The results point to a drastic turnaround in business sentiment in the past six months compared with last year's December survey when just 13 per cent of farmers expected conditions to improve in the year ahead.
The latest survey has revealed the season as the biggest influence on the strong sentiment, cited by 84 per cent of those respondents with an optimistic view as the main reason farm business conditions are likely to improve.
Rabobank regional manager for Riverina, Sally Bull said a timely turnaround in seasonal conditions in most areas of NSW and the opportunity to get back to full production were undoubtedly driving the positive outlook.
Ms Bull said the state's cropping areas were enjoying the best start to a winter season in four years, and despite challenges around restocking and the high cost of rebuilding sheep and cattle numbers, graziers were also incredibly positive.
But she was also mindful not all areas have had the break, particularly in the Monaro region, and irrigation allocations and all storages were still low. A significant fall in wool prices has also tempered optimism in the sheep sector.
"Farmers right now are incredibly positive because the hand feeding of livestock has stopped for most, crops are going in and cash flow is on the horizon," Ms Bull said.
The survey found farmers in the North West pastoral regions of NSW have been particularly buoyed by the improved seasonal conditions, and there was also strong sentiment among farmers in the Northern Rivers/ Hunter Valley region, the Riverina and Central NSW.
Of all commodity sectors, the state's grain growers were most upbeat about prospects for the coming year, with 81 per cent of surveyed NSW grain growers expecting agricultural economic conditions to improve over the next 12 months compared with 52 per cent earlier this year. Seasonal conditions were behind the optimism for 95 per cent of growers.
Despite a sharp fall in wool prices in recent months, sheep graziers remain optimistic about the year ahead with 47 per cent of those surveyed saying they expect conditions to improve (compared with 49 per cent at the start of the year).
Overall, the latest survey showed the percentage of state's farmers expecting little change in conditions now stands at 24 per cent (was 21 per cent) while the number expecting conditions to worsen was slightly down to 17 per cent (from 19 per cent).
Overseas markets and economic uncertainty were the main concerns for 54 per cent of those farmers expecting conditions to worsen, while 39 per cent cited falling commodity prices. In a sign of just how much times have changed since the previous survey, 29 per cent of those expecting conditions to worsen mentioned COVID-19 as a concern, compared with just one per cent at the start of the year.
While the survey shows NSW farmers are brimming with business confidence, 56 per cent still reported impacts from the fallout of COVID-19 on their businesses when specifically questioned about the coronavirus pandemic this survey, while 40 per cent reported no impact.
Close to one third of those impacted said problems obtaining supplies or supplies being more expensive were the main concern.
Sheep graziers were particularly concerned about the impacts of COVID-19 on their businesses, with 30 per cent of those expecting conditions to deteriorate citing it as the main reason behind the sentiment.
Ms Bull said the impacts of COVID-19 were really not front of mind for most farmers though as they are so upbeat about the fact the drought has broken.
"The chance to get back to normal production is really the focus for many farmers now," she said.
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