War in Ukraine and soaring costs shake Australian farmers’ confidence – survey

0

SYDNEY, June 14 (Reuters) – Australian farmer confidence plummeted in the last quarter as rising production costs overshadowed high commodity prices and the prospect of a bumper crop, a local government showed on Tuesday. investigation.

Although the war in Ukraine is driving up farm selling prices, especially for grain, the increases are necessary to offset rising input costs, according to Rabobank, which conducted the survey.

The study found that around 50% of Australian farmers believed the war in Ukraine would hurt farming businesses. Only 28% expected the economy to improve over the next 12 months, compared to 31% in the previous quarter.

Join now for FREE unlimited access to Reuters.com

Register

Overall, farmers expected their incomes to be stable over the next 12 months.

The bank pointed to soaring costs for fertiliser, fuel, freight and machinery – some also driven by war – as well as wider inflationary pressures in the Australian economy. All weighed on sentiment.

Rabobank Australia chief executive Peter Knoblanche said farmers had benefited from high agricultural commodity prices for more than two years but many now faced pressure on margins.

“The cost pressure is not easing and producers certainly need these higher raw material prices to deal with rising input costs,” he said.

Rabobank is one of Australia’s largest agricultural lenders.

The Food and Agriculture Organization of the United Nations’ food price index, which tracks the world’s most traded food commodities, averaged 157.4 points in May, in 22.8% increase over the previous year. Read more

“As the next round of (Russia sanctions) come into effect, farmers are very cautious about what this will mean in the longer term, which translates into lower levels of optimism,” Knoblanche said. .

Rising input costs have squeezed margins, but the survey found farm investment would largely be maintained at current levels.

Australia, one of the world’s leading grain exporters, is poised for a third year of near-record wheat production in 2022 as good weather encourages plantings in its grain belt. Read more

Farmers in Australia, who usually start sowing wheat in late April before the southern hemisphere winter, have almost completed planting of this year’s cereals on about 14.45 million hectares (35.7 million acres). ), an all-time high, according to brokerage estimates. IKON products.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Renju Jose; Editing by Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.

Share.

Comments are closed.