Rabobank state manager for NSW Toby Mendl says farmer confidence is moving in the right direction. Photo: Supplied.
US President Donald Trump may have been striking fear into exporters around the world with threats of tariffs, but farmers in NSW have a more positive outlook than they did last year, according to the latest Rural Confidence Survey by Rabobank.
The 2025 first quarter survey, released on Wednesday (26 March), found 21 per cent of NSW farmers surveyed were expecting conditions in the agricultural economy to improve in the coming 12 months (up from 18 per cent with that expectation last quarter), while 22 per cent were taking a pessimistic view (down from 25 per cent). Over half of those surveyed though – 51 per cent – expected economic conditions to remain relatively unchanged.
This means the net NSW rural confidence index has climbed to -1 per cent, from -7 per cent in the previous quarter. In the Riverina, sentiment improved but remained in slightly negative territory.
The latest Rabobank survey, completed last month, found confidence improved markedly in the South Coast/Southern Highlands, which reported the highest confidence levels across the state (a turnaround after recording the weakest sentiment in the December quarter), while confidence remained in positive territory in the South West Slopes and Plains and Northern Rivers/Hunter Valley.
Rabobank state manager for NSW Toby Mendl said while overall confidence levels were shown to have improved among NSW farmers, it had been a fairly dry summer across much of the state.
“Although, it’s not unusual to reach this point in the year where farmers are now needing rain to set them up for the year ahead,” he said.
“The uncertainty about the weather outlook can definitely temper the general sentiment at this time of year.”
The survey found farmers’ views on the seasonal outlook remained mixed across the state, with 44 per cent of NSW respondents worried dry conditions would negatively impact the agricultural economy in the next 12 months (similar to the 43 per cent with that view last survey).
But on the flipside, 32 per cent were positive about the seasonal outlook (previously 30 per cent).
Other causes for optimism among the state’s farmers were overseas markets (cited by 32 per cent) and rising commodity prices (for 31 per cent).
But NSW farmers also expressed concerns around external macro influences – government intervention/policies were an issue for 31 per cent and overseas markets/economies were also a worry (for 30 per cent, up from 21 per cent last survey).
“Farmers are keeping a close eye on trade policies and potential tariffs,” Mr Mendl said.
“Geopolitics remains an area of concern this year for Australia’s ag sector – with US trade duties creating volatility, along with Middle East tensions and the war in Ukraine all having the potential to impact local markets and prices.”
By commodity, NSW sheep producers reported the strongest turnaround in sentiment in the state (with net confidence rising from -33 per cent to 4 per cent), while dairy producers also posted a significant upswing (from -15 per cent, to 3 per cent).
“Robust consumer demand for red meat that has been seen in the US has driven beef retail prices to unprecedented levels, potentially affecting lamb prices too,” he said.
“The average price of Australian lamb imported into the US is currently about 12 per cent higher than it was at this time last year. While a weaker Australian dollar is partly responsible for this rise, import prices in US dollars have also increased compared to a year ago.”
The Rabobank Rural Confidence Survey has been conducted since 2000 by an independent research organisation. The next results are scheduled for release in June.
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