Rebound in confidence in post-farmgate sector



Improved seasonal conditions and the falling Australian dollar have driven a rebound in confidence, and expected conditions for the coming 12 months, for the post-farmgate agribusiness sector.

The latest quarterly National Australia Bank (NAB) post-farmgate agribusiness survey shows that the index for business conditions rebounded in the December 2014 quarter to +1, up from -6 in the previous survey.

Khan Horne, General Manager of NAB Agribusiness said that confidence in the sector had been boosted by a number of factors.

“We expect the AUD to continue to fall and, combined with a stabilisation in international dairy prices and continued demand for Australian beef, this may lead to further improvement in conditions,” Mr Horne said.

“The outlook for conditions over the next three months improved significantly, with the index rising to +6 from the previous measure of -1.

“Expectations are even higher for the next 12 months, with the index up from +5 to +12. This wasn’t mirrored in overall business expectations and shows that agribusiness is more optimistic than the broader Australian economy,” he said.

Confidence across individual commodities in the December quarter was mixed.

“The index showing the level of confidence in protein was a standout in the survey. Beef was up considerably to +33 with the beginning of encouraging rains in Queensland, while confidence in sheep meat was down slightly to a still very optimistic +31,” Mr Horne said.

“Similarly, confidence in dairy jumped from +23 to +32. This may reflect the first signs of an increase in international dairy prices, but more likely reflects stronger seasonal conditions.

“Confidence in fibres was mixed. Cotton was up sharply to +5 from -22, despite lower domestic planting on account of lower irrigation water availability. Confidence in wool fell to -7 despite prices remaining relatively stable,” he said.

Agribusiness capital expenditure expectations for the coming year also increased from +21 to +28, more confident than overall business expectations of +21 across other sectors.

View the December 2014 Post-farmgate Agribusiness Survey here



Related Articles

  • Climate

NAB backs new renewable wind farm in Far North Queensland

NAB today announced it is the only Australian bank providing project finance for global renewable energy power producer Neoen to build a $370 million wind energy hub in Far North Queensland.

  • 20.09.2021
  • Time to read 2 min read
  • Community

BBQs at the ready for Western Australia’s first AFL Grand Final

Australia’s favourite past time of firing up the BBQ will be in overdrive this weekend with Western Australians expected to spend big and celebrate hard.

  • 20.09.2021
  • Time to read 3 min read
  • Economy

NAB CEO Opening Statement to the House of Representatives Standing Committee on Economics

Current forecasts show 80 per cent of eligible Australians will have had their first jab within three weeks, and their second jab by mid-November. This is our light at the end of the tunnel.

  • 08.09.2021
  • Time to read 4 min read

Quick links

National Australia Bank — NAB

Sometimes When The Unexpected Happens, We Realise What We Truly Value. Whether A Home, Farm, Business Or Your Passion, NAB Is Here To Support You.

Business Research and Insights

For more business news and analysis, visit NAB’s Business Research and Insights.