ABOUT a third of Australian wool and prime lamb farmers surveyed by the Commonwealth Bank are looking to expand their operations.
The research found there will be a particular focus on investing in livestock production in the coming year, with solid investment intentions for wool, lamb and beef.
The bank’s Agri Insights researchers surveyed 1400 Australian farmers on a range of business intentions.
They found 33 percent of wool growers and 31pc of lamb producers surveyed were looking to expand their operations. This compared to just 9pc of wool growers and 13pc of lamb producers planning to reduce their operations.
In cattle, 2pc of dairy farmers surveyed said they will expand their enterprise (versus 11pc to reduce) and 24pc of beef producers planned to scale up (14pc to reduce).
The bank said this trend followed strong commodity investments over the past 12 months, with 10pc of farmers saying their biggest increases in investment were in their beef operations. Of those who invested more in livestock, many did it to make the most of strong returns.
Commonwealth Bank’s executive general manager of regional and agribusiness banking Grant Cairns said with continuing high prices and demand, strong investment intentions were being seen across the spectrum for livestock in the next 12 months.
“This has coincided with some reduction in grains intentions as some farmers respond to lower prices and the sometimes greater flexibility that livestock can offer,” he said.
According to the survey, 35 per cent of grain growers who will reduce their enterprise are reacting to lower prices.
Strong interest in innovation and technology
The survey also found that the Australian farmers surveyed aim to increase investment in innovation and technology as a key way to future-proof their operations.
More than a third of the farmers surveyed (37pc) plan to increase investment in technology and innovation, versus three percent who plan to decrease. Those who said they would increase were mainly doing it to enhance productivity and efficiency and gain greater benefits from their equipment and farm production methods.
Mr Cairns said farmers recognise that innovative practices and technology were a profit driver that help them to achieve more from their operations.
“When we asked farmers why they were directing more of their spend towards tech and innovation, many talked in terms of longer term productivity.
“Farmers know that getting the best tech on farm allows them to do better in good years and also positions them to get through the tougher years,” he said.
“It’s about maximising the return on investment not only of their equipment, but their people and their own time and effort,” he said
Overall, fixed infrastructure, plant and equipment investment was the focus of the most increased investment over the past 12 months (31pc), and continued to present strongly for the coming year, with more than one third of surveyed farmers (35pc) planning to increase in the coming year.
The Agri Insights research pointed to a strong, resourceful and forward-facing agri sector,” Mr Cairns said.
Source: Commonwealth Bank.