Rural
21 December, 2023
Confidence sugar hit
Signs seasonal conditions might be improving for the agricultural sector have helped fuel an uptick in confidence among Queensland’s primary producers in the fourth quarter of 2023.
The latest Rabobank Rural Confidence Survey found sentiment in the state’s rural sector has increased marginally.
While more Queensland producers expect the agricultural economy to worsen (49 per cent this quarter, compared to 45 per cent last quarter), this was off set by 19 per cent of producers now expecting the year ahead to improve (up from 13 per cent previously).
The improved confidence levels were shown to be largely fuelled by the state’s sugar sector, where sentiment showed an upturn.
Of those Queensland producers with a positive view, 43 per cent nominated a good seasonal outlook as a key reason for their optimism (up from 22 per cent in the previous survey).
However, a considerable number of the state’s producers were less optimistic about the weather outlook, with drought identified as the chief concern among those expecting the agricultural economy to worsen in the year ahead – nominated by 62 per cent (up from 30 per cent previously).
Falling commodity prices were also a worry (for 53 per cent of producers expecting business conditions to deteriorate, up from 43 per cent previously).
Concern about interest rates and input costs, however, were shown to be easing.
The survey found just nine per cent nominating rising interest rates as a cause for their negative view (down from 21 per cent last quarter) and 19 per cent nominating rising input costs (decreasing slightly from 29 per cent last quarter).
Rabobank regional manager for Southern Queensland, Brad James, said anecdotally there has also been a general lift in producer mood in recent weeks following “good storm rain” received in many parts of the state.
“And this kick in confidence may not have been entirely captured during the period the survey was in the field,” he said.
“These early summer storms – while very useful – have been patchy.
There are still areas in Queensland waiting for a break in the season.”
Mr James said the early start to the cyclone season – with Cyclone Jasper approaching the north Queensland coast – will hopefully bring some beneficial rain for producers in the north, without causing too much damage.
“It is impossible to gauge the potential impact of the cyclone until it makes landfall, we hope people in the region have taken the opportunity to prepare and are able to stay safe,” he said.
The survey, completed last month, found sugar cane growers were the most optimistic producers in the state.
There was a significant lift in sentiment from last quarter, when over half surveyed in the sugar sector had taken a pessimistic outlook for the year ahead.
“Globally, 2023 saw the sugar market hit its highest prices since 2011,” Mr James said.
“Queensland growers have recorded very good yields and good sugar production during this year’s harvest.
“And it has been a ‘dry harvest’ in many cane-growing regions this year, meaning growers have been able to bring in their entire crops, and not be delayed or lose crops with wet weather conditions.”
Good seasonal conditions, strong commodity markets and the international economy were the key reasons behind sugar cane growers’ more positive outlook.
The view on the year ahead, however, was comparatively more moderate among the state’s cotton growers this quarter.
“Irrigated cotton growers will be going into the next season with access to reasonable water allocations – topped up by the recent storm activity – giving those growers confidence to plan and prepare,” Mr James said.
