The pressure of rising farm costs is damaging vegetable grower confidence, according to the inaugural Economic Confidence Survey by industry body, Ausveg.
The quarterly confidence survey reveals that growers rank input costs as one of the most worrying factors that could impact their financial performance.
“Growers are continuing to voice their pessimism about farm costs such as freight, energy and labour, with approximately 70 per cent of respondents giving a pessimistic ranking of such expenses,” said Ausveg economist, Steve Razdan.
“This pessimism confirms that farm costs continue to weigh heavily on the minds of growers, as well as on their bottom lines. It’s worrying that so many members of the industry are facing such high levels of stress about the costs needed to keep their businesses running.”
Ausveg represents more than 9000 Australian vegetable and potato growers.
The confidence survey also reveals sources of optimism for the industry’s future, with growers feeling confident about interest rates and the prospect of future investment.
“In contrast to the negative grower sentiment surrounding production costs, respondents feel significantly more positive towards interest rates, with almost 70 per cent feeling optimistic throughout the March quarter,” said Razdan.
“Positive sentiment is expected to continue over the next quarter, with the Reserve Bank of Australia announcing a further cut to interest rates last week, bringing them down to two per cent. Assuming that banks pass on this rate reduction to borrowers, this decision will increase the propensity of capital investment as growers will be able to borrow money at a cheaper rate.”
“This coincides with a general optimism towards investing, with the majority of respondents expressing confidence in investing in light of current economic conditions.”
“We encourage all growers to keep an eye out for the next quarterly survey, which will be conducted in early July. By making their voices heard, growers can contribute to an accurate snapshot of the concerns of the vegetable industry.”
Information from the quarterly survey will be used to track and communicate grower sentiment in relation to economic indicators over time, with respondents located all over Australia and varying in farm size.
