FED:Floods, drought cut farm spending: index

AAP General News (Australia)
04-18-2011
FED:Floods, drought cut farm spending: index

CANBERRA, April 18 AAP - Floods and drought have pulled farmers back from their production
highs of last September, but farmers are still confident, figures suggest.

The latest Westpac and Charles Sturt University (CSU) Agribusiness Index was released
on Monday, providing a snapshot into how Australia's farming sector is performing.

Taking in overall business productivity, employment and investment indicators, it had
its Economic Performance Index (EPI) at +0.05 for the March quarter.

That's down from the all-time high of +0.12 just last September.

Westpac agribusiness chief executive Graham Jennings said farmers cut capital expenditure
across the board because of floods in the east and continued drought in Western Australia.

That dragged down the economic performance of all the states, except for South Australia.

It performed the best over the quarter, registering +0.25.

But despite the overall drop in EPI, Mr Jennings said farmers were feeling positive.

Seventy-six per cent say they're confident about how their business will run over the
next 12 months, compared to 69 per cent at the same time last year.

It's expected that the EPI will increase in all the states for the next quarter, with
capital spending on the up.

"This reflects continued strong prices and outlooks for almost all agricultural products,
the continued strong performance of the Australian economy and still very good to excellent
seasonal conditions in eastern Australia," Mr Jennings said in a statement on Monday.

"Even in Western Australia, confidence is recovering."

WA had the lowest rate of business confidence at 66 per cent.

AAP cj/sb/nb

KEYWORD: AGRIBUSINESS

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