Positive outlook for farmers, time to plan for future risk

The National Farmers’ Federation (NFF) has today welcomed the ABARES agricultural commodities report for the September quarter, showing that earnings for Australian wheat, wool, rice, canola, cotton and sheepmeat are all expected to rise. The report has been released on the same day as the NFF Agribusiness Loan Monitor for September, which shows that agribusiness rates have again remained stable against the RBA official cash rate, with interest rates remaining on hold at 4.75 percent for the tenth consecutive month. “The overall picture for agriculture across Australia during spring is very positive – perhaps more positive than at any other time in the last 10 years,” NFF economics committee chair John McKillop said. “Interest rates are on hold, the majority of commodity prices remain strong, the seasonal forecast is primarily positive and, with harvest and planting both approaching, we are on track to achieve a large winter crop and increased summer crop. “Of course, variability and fluctuations are all part of the farming business and seasonal and commodity forecasts don’t always ring true. Farmers are also still facing other challenges, like the strong Australian dollar, which has fallen slightly this week but still remains a hurdle for export-reliant agricultural industries and farmers. “And there’s an increased talk of a La Nina pattern developing later on in the year, which could cause havoc with both winter and summer crops. “As farmers know only too well, risk management in farm businesses is essential. We encourage all farmers to continue adopt risk management tools that are appropriate for their businesses like price hedging and on-farm grain and feed storage to ensure they are somewhat insulated against any variables or fluctuations – be it in interest rates, the weather, commodity prices or the Australian dollar,” Mr McKillop said. The September NFF Agribusiness Loan Monitor can be downloaded below or via the http://www.nff.org.au/publications.html#cat_2119[Publications page]