Forget the pandemic panic, ag's feeling upbeat on farming's fortunes

Coronavirus panic bypasses ag - farmers feel upbeat about prospects

Coronavirus
Poll position: The Chi Squared confidence survey of 723 Australian farmers was conducted March 19-23.

Poll position: The Chi Squared confidence survey of 723 Australian farmers was conducted March 19-23.

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Two thirds of farmers surveyed feel their own farm incomes could rise in the next six months.

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In a remarkable show of rural optimism, fresh polling indicates farmers do not fear a widespread economic backlash from the coronavirus pandemic, in fact, two thirds foresee their own farm incomes rising in the next six months.

While the disease outbreak has sent global business confidence plummeting, a survey of more than 700 producers Australia-wide in the past week also showed almost a third felt the overall farm economy could improve.

Another 33 per cent expected the nation's agricultural sector to continue performing in the next six months much as it has been.

I doubt COVID-19 will have a huge impact here - NSW farm survey respondent

Cattle and grain producers were more likely to expect their earnings, and the general farm economy, to lift while the sheep industry was slightly more inclined to falling expectations.

The responses mirrored a cautious but widely proactive mood observed by rural bankers and farm leaders.

The survey's farmer feedback generally pointed to robust demand for food and good livestock prices in the wake of widespread useful rain in many regions.

"Demand for meat should still be strong so prices for stock will remain fairly good and the restocker market will be strong if we get good rain - I doubt COVID-19 will have a huge impact here," said a NSW livestock producer whose thoughts were typical.

Rather than letting coronavirus concerns weigh on their business plans, a lot of farmers were largely focused on opportunities opening up thanks to the prospect of better seasonal conditions after years of drought.

In fact, just over half of those surveyed by Adelaide-based farm sector research business Chi Squared said the coronavirus emergency had resulted in no obvious changes to their day-to-day farm operations.

A further 40pc of respondents acknowledged they had recently made minor changes, but just 6pc said they had been forced to significantly modify their farm business operations.

The findings, compiled for Australian Community Media, noted 78pc of farmers interviewed regarded their businesses as "viable" or "easily viable" prior to the COVID-19 pandemic hitting the headlines last month.

That viability figure was still holding above 60pc early last week, despite the wider Australian population's fears about coronavirus' significant impact on the economy, unemployment and overall business confidence.

However, the number now considering their farm enterprises as "easily viable" had halved from 32pc to 15pc.

For the first time in a while those in the ag sector seem better positioned than most to manage their way through this crisis - Karen Rogers, ACM agricultural research

While farmers were not ignoring the big economic and social impact and uncertainty the pandemic was causing, most felt better placed to weather the testing conditions than many other Australian industries.

Getting on with the job

"For the first time in a while those in the ag sector seem better positioned than most to manage their way through this crisis," said agricultural research manager with ACM, Karen Rogers.

"Sure there are concerns about the availability of crop inputs, or getting livestock sold, but clearly farmers are focused on getting on with the business of running farms.

Karen Rogers

Karen Rogers

"They've got animals to fatten, or breed or shear, crops to plant and they want to take full advantage of any good season and market factors in their favour.

"Given many rural areas have had tough, dry years lately, the possibility of not getting enough rain generally still rates as a bigger immediate worry to farmers than coronavirus."

That sentiment was highlighted by another NSW producer who noted while global markets might be harder to predict "as long as we get rain for crops I think things will remain the same".

"Farms are a great place to practise voluntary self isolation," he said.

Similarly, a South Australian producer said "after three indifferent seasons I'm quite optimistic we'll have a good 2020-21 and get back on track financially and mentally".

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Farmer spending trends were mostly unlikely to change greatly according to survey results, although in some cases the coronavirus emergency had prompted producers to order early or plan ahead for farm inputs because delays had already occurred for fertiliser and chemical.

Only 6pc of respondents intended cutting back on farm input purchases because of COVID-19 concerns.

Almost 70pc expected to maintain or even increase their purchasing plans given the improved seasonal outlook.

Ms Rogers said of those farmers feeling COVID-19 was unlikely to have a significant impact on the industry, about 60pc were relatively upbeat about their position, basing their assumptions on the fact "people will still need to eat".

It may shift the whole thinking of society to support local food growing rather than cheap imports - West Australian farmer respondent

Others felt being isolated was not a serious problem and livestock sales would continue, even if the formats changed.

"The only negative impact on my enterprise will pretty much be if I personally contract it and die," said one respondent.

A West Australian comment noted coronavirus could "shift the whole thinking of society to support local food growing rather than cheap imports".

Shortages, higher costs

Of those feeling negative about the pandemic's impact, half worried about the availability of inputs, or possible cost rises because of supply shortages and the low dollar.

One Queenslander's views reflected the thoughts of many.

Geoff Firth

Geoff Firth

"Being producers we're probably in the best of all industries facing this, but input costs will rise, access to inputs like seed, fert and fuel is a worry, and family health is uncertain."

The ACM project's widely upbeat responses follow Rabobank's February farmer confidence survey results hitting a five-year high.

Rabo's country banking general manager Geoff Firth said despite COVID-19's national impact growing significantly in the past month, bankers still reported strong confidence levels in the bush, fuelled by good rain, feed growth and robust markets.

"Clients generally see themselves in a good place at the moment and they're happy to stay on-farm and plan ahead," he said.

"If there's a career that's well suited to working from home, this is it."

National Australia Bank's regional customer executive Khan Horne said while feelings were mixed because of unease about a global economic slowdown, agribusiness was open for business, "even if farmers have locked their gates and are at home getting on with their jobs".

Khan Horne

Khan Horne

"There's optimism about agriculture generally, but an array of reactions because nobody in the game today has been through world wars or the depression," he said.

"We have, however, survived cyclones, droughts, a high dollar and live export bans, so we'll work through this with our customers, too.

Resilient, but careful

Livestock SA president, Joe Keynes, said farmers he knew felt agriculture would be fairly resilient and far less vulnerable than other parts of the economy, but there was a real unknown, too.

"People are also concerned about how the disease may impact the farm sector - a lot of farmers out there are aged over 55," he said.

We're going about our business as normal, but we're also mindful about our employees, and keeping safe distances from visiting contractors rather than all getting our hands into the job together."

Joe Keynes

Joe Keynes

Rabobank's Mr Firth noted farmers had been buying early so they had inputs from fuel and fertiliser to welding rods and wool packs on hand, while some would take advantage of Canberra's full depreciation incentives on equipment purchases up to $150,000 by June 30.

"Generally everything in farming is long term, so the current focus is on staying the course, looking ahead for potential logistical challenges and maybe bringing forward some expenditure if it helps your plans," he said.

Finding labour normally sourced from overseas was one logistical challenge facing North Queensland's horticulture sector, and the WA seeding season where northern hemisphere farm exchange workers frequently help out.

The horticulture sector hoped to make do with existing visa workers extending their stay in Australia and WA farmers looked likely to help each other.

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