05 Apr Rural Sector Sentiment Falls Amidst Market Concerns
Market sentiment from rural Australian producers has fallen to its lowest level since late 2018 as producers continue to navigate a range of economic and financial uncertainties, with commodity prices, interest rates and re-emergence of drought topping the list of concerns.
According to the latest Rabobank Rural Confidence Survey, the number of producers expecting the agricultural economy to improve over the coming 12 months dipped to 11 per cent in the first quarter of 2023, compared with 15 per cent in December 2022.
Although just over 50% of Australian producers continue to expect business conditions to stay the same (51 per cent, marginally up on 50 per cent), more are anticipating conditions to worsen (36 per cent, up from 31 per cent).
These findings indicate that whilst Australian producers ended 2022 on a high, buoyed by seasonal conditions and high commodity prices, this year is seeing conditions return to more “normal” levels, reflecting the fact that commodity prices are unlikely to return to the highs seen in 2022.
This, combined with the anticipation of further interest rate hikes, which place pressure on farm budgets, all culminate in the fall in market sentiment.
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