Australian farmers set to invest
Most Australian agribusiness sectors intend to expand production this year as our Agri Insights Index hits 10.3 points.
The Index tracks changes in investment intentions over time, and the latest result is very encouraging, reflecting considerable optimism in the industry.
Our third bi-annual Agri Insights report shows investment intentions are particularly strong in the dairy and prime lamb sectors, with beef looking much more positive than 12 months ago.
Livestock leads the way
Dairy and prime lamb producers are the most likely to be planning to expand operations. Dairy intentions were buoyed by an increase in the world dairy price index at the start of the year along with continued strong demand from Asia, while we’re seeing growing intentions among lamb producers to rebuild flocks on the back of strong global demand.
I’m also very pleased to see beef intentions have recovered strongly, with six per cent of all producers now saying they will expand production. This time last year, results were negative, with nine per cent of all producers expected to reduce the size of their operations, so this is a significant turnaround underpinned by good prices.
Balance is best
In our latest survey we asked farmers a series of questions about their farm management and marketing approach. Results show the majority are actively adjusting farm management strategy to meet the needs of the market.
Most also use a combination of approaches to get the best return for their product, with a smaller number preferring to stay with a tried and true method that has served them well in the past.
These results suggest a comfortable balance between proactive management and risk mitigation. In any industry, you need a mix of early adopters and those who take a more conservative management approach. While innovation is essential to keeping our industry competitive and sustainable, a measured approach helps manage risk.
Farmers in the 35 to 44 year age bracket are the most driven to try new innovations, with almost half of that group reporting they are usually among the first in their farming region to try out new ideas.
Our survey shows that two in three (69%) of farmers believe quality and production are more important than cost management in driving profitability.
In particular, there’s a commitment to continual crop and livestock improvement, which is vital to maintaining our industry’s reputation for clean, green product.
The survey, the most comprehensive of its type, canvassed 1,600 farmers across nine agribusiness sectors, being horticulture, winter grain, sugar cane, prime lamb, dairy, wool, summer grain, beef and cotton.
Other interesting results
Women are somewhat more willing to lead the way in trying new products or approaches (42% of women versus 38% of men) and they are also more likely than men to be prepared to adjust their practices in response to the market (64% versus 60%).
20% of farmers are looking to increase investment in farm technology and innovation, 31% intend to increase investment in fixed infrastructure and 16% intend to increase investment in plant and equipment.
What is the Commonwealth Bank Agri Insights report?
Agri Insights canvasses 1,600 Australian farmers about their intentions for their farm enterprise over the coming 12 months.