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Category: Dairy Production / Floods / Economic Trends

Tasmanian farmer confidence dips to three-year low

Monday, 29 Aug 2016 10:24:44

Many farms across Tasmania's north were inundated during the June floods. (Supplied:)

Farmer confidence in Tasmania has dropped to a three-year low off the back of major flooding in the state's north and retrospective cuts to milk prices.

The latest Rabobank rural confidence survey found 30 per cent of the state's farmers expected conditions to worsen over the next 12 months — up from 18 per cent last quarter.

Nationally, 16 per cent of farmers expected worsening conditions.

Rabobank state manager Hamish McAlpin said it had been a challenging few months for a number of agriculture sectors in Tasmania.

"Significant flooding through the north of the state ... that's been a significant driver of a lack of confidence," he said.

"The other driver ... is the dairy industry and the milk price drop late last season and then really low opening prices for the coming season."

The lack of farmer confidence in Tasmania is also impacting investment intentions, particularly in the dairy sector.

"Cost of production has really been cut as much as it can, in light of those low farm gate milk prices offered by Murray Goulburn and Fonterra," Mr McAlpin said.

"Investment in dairy in particular is really a story of 'batten down the hatches' and survive this year."

The survey shows farmer confidence is improving in most other states.

"We've had widespread rains across parts of Queensland, New South Wales and the eastern seaboard generally, you know Victoria's received good rain so confidence nationally is looking really good," Mr McAlpin said.

"Tasmania, because of those issues around dairy and those issues around flooding, is just in contrast to the national result."

Red meat producers buck the trend

Mr McAlpin said Tasmania's red meat producers were looking at a good season, thanks to strengthening livestock prices, good winter rainfall and lower input costs.

"If you haven't received significant rainfall events and flooding on farm, after the really dry year in Tassie last season, that rain has been really handy ... it's filled dams on farm," he said.

"Grain prices are at a 10-year low, so cost of production for the livestock sectors — dairy in particular — are one bright spot in amongst that poor outlook for price.

"The outlook sentiment is for a really good spring so that's really positive for the state."

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