Easing commodity prices, rising interest rates and dry seasonal conditions have seen confidence decline among Queensland primary producers in the first quarter of 2023.
The latest Rabobank Rural Confidence Survey found overall producer confidence levels in the state have dropped from the previous quarter, which had seen sector sentiment stabilise in the latter months of 2022. Only one in 10 Queensland producers are now expecting improved conditions in the agricultural economy in the year ahead (down from 14 per cent in the previous quarter).
More expect business conditions to decline, up from 26 per cent last quarter to 40 per cent. Those expecting conditions to remain the same stood at 49 per cent – down from 55 per cent last quarter. Concerns about commodity prices, interest rates and dry conditions drove the negative outlook among producers, while rising input costs and excessive rain, worries for producers late last year, are now less of a concern.
Among those expecting the agricultural economy to decline, 59 per cent cited easing commodity prices – an increase from just 16 per cent with that concern last quarter. Higher interest rates were cited by 27 per cent, an increase from 18 per cent last quarter. And while another La Niña weather system saw much of the state receive above-average rainfall across summer, dry seasonal conditions in parts of southern Queensland were identified as a worry by 15 per cent (lifting from seven per cent last quarter).
Rabobank regional manager for North Queensland and the Northern Territory Trent McIndoe said many Queensland producers were enjoying a “first-class” season as a result of a third consecutive La Niña, while there are “pockets, particularly in southern Queensland”, that had missed the summer rain.
The number of Queensland beef producers expecting business conditions to decline in the year ahead has risen from 18 per cent last quarter to 40 per cent this survey, while just eight per cent expect an improvement (down from 14 per cent). Half of Queensland beef producers surveyed (50 per cent) are expecting business conditions to remain unchanged.
Mr McIndoe said confidence had remained stable among the state’s grain growers, with sentiment helped by last year’s wet spring and early summer that had delivered “a good but diminishing” soil moisture profile across much of the eastern Darling Downs, while noting grain growers in areas west of Goondiwindi missed out on much of the summer rainfall.
He said cotton production was on track in southern Queensland, after experiencing cooler conditions that led to a slow start to the season.
The authoritative Rabobank Rural Confidence Survey has been conducted since 2000 by an independent research organisation. The next results are scheduled for release in June 2023.
