Putin’s war dents Queensland agriculture sector confidence as costs rise and prices tipped to fall
Richard Dinnen - Queensland Editor |
There’s been a significant drop in confidence among Queensland primary producers, with war-driven input cost rises a key concern.
The latest Rural Confidence Survey, conducted by Rabobank, found 28 per cent of producers expect agribusiness conditions to improve in the coming 12 months, significantly down on 39 per cent in the previous quarter.
The quarterly survey is a key indicator of sentiment in the agriculture sector. It found significant concern about the rising price of key inputs such as fuel, sparked by Russia’s invasion of Ukraine.
More than 60 per cent of Queensland producers said the war would have a negative effect, affecting the cost and availability of vital farm inputs such as fertiliser, fuel, freight, and machinery.
They also said the Ukraine war would add broader inflationary pressures.
Rabobank regional manager for Southern Queensland, Brad James, said producers were also apprehensive about a possible downturn in currently high commodity prices, but the overall outlook remains positive.
“High input costs are undoubtedly causing margin pressures, but the combination of good seasonal conditions and current strong commodity prices had sustained sentiment at still positive levels.
“This is providing the confidence for producers to continue investing in their businesses.”
Mr James said good seasonal conditions across much of the state had helped keep confidence up, but the north-west remains dry and the south-east corner has seen too much rain.
“We saw devastating flooding in south-east Queensland in February, and more extreme rainfall events recently that created massive challenges for producers in the region.
“But many other areas of Queensland are enjoying one of their best seasons in years.”
The beef industry is Queensland agriculture’s most positive sector in the latest survey, with sugar cane producers also showing high optimism. Grain sector confidence was unchanged from the previous quarter.
Mr James said a significant number of producers intend to invest in property or infrastructure in the coming 12 months, but they will be challenged by supply chain disruption and labour availability.
“Global supply chain delays and limited labour will be impacting producers’ infrastructure development plans.
“Producers are being challenged by the cost of materials and machinery, the long wait times for deliveries and the ongoing challenge of finding labour.”
