Despite tough on farm conditions throughout the first quarter of 2013, post-farmgate agribusiness confidence in animal proteins improved overall, National Australia Bank reports in its latest Post-farmgate agribusiness survey.

The survey demonstrated that confidence in poultry had the greatest improvement at +13 points, with sheepmeat lifting +10 points. Dairy also reported an increase, although overall was still negative at -4 points. Confidence in beef settled at neutral, after only a small improvement.

Higher input costs, in particular the increasing costs of feed, has been the major constraint to business profitability over the quarter. However, grain prices are forecast to ease over the coming months, potentially expanding business profit margins.

China and the Middle East have increased their demand for lamb exports, which has boosted agribusiness confidence in the capacity of these growing export markets.

Commenting on the findings, NAB agribusiness general manager, Khan Horne, said while overall post-farmgate business conditions dipped back from their December quarter high, expectations for profitability and the overall outlook remain optimistic.

Expected capital expenditure over the coming year surged to the highest level in more than a year at +20 points, as did capacity utilisation which is sitting above the long term trend at 79.4pc.

“However, sluggish consumer demand continues to weigh on post-farmgate businesses and remains the single most significant constraint to future business profitability,” Mr Horne said.
 

• To access the full NAB Post-farmgate agribusiness survey, click here.