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Commbank ag report shows optimism

Australian farmers are more confident and optimistic about the future of farming than at any time in the previous three years. Sources: AFDJ eNews, The Australian

A close-to-ideal season across much of Australia last year combined with record crop production and high prices for beef cattle, wool, lamb and sugar, is encouraging 35% of farmers to plan to invest this year in new fences and buildings and one-in-four to buy new machinery, according to the latest agricultural insights survey from the Commonwealth Bank.

More farmers are preparing to increase spending on technology, hire more workers and use more outside advisers and consultants than ever before, in a bid to become more productive and profitable.

Another 6% have their eye on buying the farm next door, or expanding the number of hectares, livestock and properties in their existing agricultural enterprises.

The resurgence of optimism in the agricultural sector, as well as the arrival of drones, robots, farming apps and mobile-phone controlled GPS-machinery, is also fuelling a dramatic influx of young people to the agricultural sector.

After years of national lamenting that the average age of farmers was in the mid-50s and that few rural-reared children wanted to remain on the land, the survey this year revealed a big 10% of all Australian farms expect to welcome back returning adult offspring this year.

Commonwealth Bank agribusiness chief Grant Cairns said an unusual aspect of the survey was that the farmer wellbeing and optimism was spread across most sectors and all parts of Australia, with livestock producers leading the charge.

After years of low prices, the recent wool boom has a record 18% of wool producers looking to invest in new equipment and enterprise expansion, the same level enjoyed by the super-buoyant beef cattle sector.

Confidence even appears to be slowly rebounding in the suffering dairy industry, with 12% of farmers saying they’ll expand their enterprise, compared with just 1% six months ago.

Mr Cairns said the strong investment sentiment will not stop at the farm gate, but extend right through regional commun ities and rural businesses.

“We’re expecting to see a solid knock-on effect as farmers implement their investment plans,” Mr Cairns said. “Strong market conditions look set to translate into increased employment opportunities, more purchasing of machinery and equipment and more hiring of employees, consultants and contractors; that’s good news for every part of rural and regional Australia.”

Unusually, confidence was highest among farmers in Tasmania where fine wool remains a key industry and the state government has been investing in irrigation expansion.

The report can be downloaded at: https://www.commbank.com.au/business/can/managing-an-agribusiness/agri-insightsreport.html