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Queensland farmers lose confidence as tough season and easing prices bite

By Kallee Buchanan and Marty McCarthy, Tuesday March 14, 2017 - 15:17 EDT
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Farmers in south-east Queensland are dealing with the aftermath of a dry summer. - ABC

Poor seasonal conditions and easing commodity prices have been credited with causing a sharp decline in the confidence of Queensland farmers



After two consecutive quarters of strong sentiment, the latest Rabobank Rural Confidence Survey reported those expecting the agricultural economy to improve in the next 12 months dropped from 41 per cent of people surveyed to 23 per cent.

The number expecting the situation to worsen rose from 12 to 19 per cent for the same period.

Southern Queensland and northern New South Wales regional manager Brad James said while more of the state's farmers were optimistic than pessimistic, it was clear tough conditions were taking a toll.

"The season across the state has been varied, but particularly in the ," he said.

"However, even in the north, where for the most part it's fairly green at the moment, they haven't had the wet season they were hoping for."

Previous highs corrected

Mr James said the slide in sentiment could be considered a correction.

"I think it's a cocktail of factors. I think it's commodity price, it's certainly season and I think a lot of it has got to do with what's happening in the sector as well," he said.

"When we look broadly across agriculture at the present time it's pretty good, there's a general alignment of planets.

"There are those that have missed out on rain, there are those that seem to get a good run and then have a bad run, there's never a constant among all sectors."

Mr James said that diversity meant as some sectors did poorly, others held steady, with commodity prices the likely common denominator.

"Wheat is back a little, cotton's not too bad, sugar's not too bad, beef's very good," he said.

"Of the major commodities, the grains are generally pretty good … but across the entire sector I think it's a better news story than a bad news story."



Despite the fall in sentiment, the willingness of farmers to maintain or increase their investment in their businesses held relatively steady at 92 per cent.

"What we need to remember is anecdotally 90 per cent of people in agriculture are generational investors," Mr James said.

"So I'm not surprised at all to see the investment sentiment remaining fairly strong whilst confidence might be back a little, because they're long-term views."

Cane crop halved by drought

Confidence in the sugar industry crashed from 34 per cent to 4 per cent, a situation that was likely exacerbated by the deteriorating season, especially in the south.



Maryborough Canegrowers chairman Jeff Atkinson said the region was likely to lose half its crop — about 400,000 tonnes — to the dry.

"Some of it will be stood over to the next year, but I've been talking to growers and they say they've lost stool and some of that's plant cane, some of that's first ratoon, so there's a huge cost in replanting," he said.

"Some growers have forward priced as well and they're going to be battling to fill their commitments, so there's that issue as well.

"A little bit of dry, people live with that, but when you get it extreme, [we've had] 32mm [of rain] since January. You can't grow a cane crop on that.

"There's no morale, [growers] are down, they got through the last one [dry year] and thought that's over now. To get another one within three years, that's what really knocked the wind out of their sails."

Breeder cattle sold off as drought spreads

Drought-affected graziers in south-east Queensland are having to sell off breeder cattle, which is expected to make the industry's eventual recovery from the drought more difficult.

The Sunshine Coast and Gympie region has had its driest and warmest summer on record, receiving just over a quarter of its average rainfall in the past three months.



Beef producer Ivan Naggs, from Wolvi east of Gympie, said graziers were selling cattle because they did not have enough grass to feed them.

"Experienced graziers know their carrying capacity and know they can't carry them through," he said.

Mr Naggs, who also represents his region as a councillor for AgForce, said farmers were getting so desperate they were also selling their core breeder cattle.

"That is the stock they know has a history of fertility and productivity, and that is what is being offloaded now," Mr Naggs said.

"I'm hearing that all over the south-east corner of the region I cover for AgForce, so it's not a good picture out there.

"Whenever this drought breaks we are going to find young, good quality breeding stock very scarce and expensive to source."

Serious situation in south-east

Mr Naggs said the situation was dire for many south-east Queensland graziers.

"It is quite very sad to see dams empty through the South Burnett and hardly any grass in paddocks," he said.

"It's quite serious, particularly in that western part of the Gympie region."

As farmers try to offload cattle, the price they get for them in the saleyards is also dropping, further compounding the problem.

Mr Naggs said prices had dropped by hundreds of dollars per animal as excess cattle flooded the market.

"Compared to two and a half years ago the price is still pretty good, but compared to prices in the August-October period last year, we're down $250 on a fat cow," he said.


- ABC

© ABC 2017

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