Rural confidence has edged up in South Australia, yet many farmers are sitting on the fence as they take stock of the season, the outlook and the market.
The latest quarterly Rabobank Rural Confidence Survey saw SA’s rural sentiment index shift to a net eight per cent, increasing from three per cent last survey.
This sees farm sector confidence turn around, after dropping significantly in winter.
The survey found slightly more of the state’s farmers now expected agricultural business conditions to improve over the next 12 months, with 37 per cent positive (up from 32 per cent).
The number of farmers anticipating conditions to worsen remained stable at 29 per cent, while 30 per cent were expecting no change.
Rabobank state manager for South Australia Roger Matthews said it was very much a case of watch and see, as farmers move through the critical spring period.
“Falling grain prices – lentils in particular – are quite a concern for growers and the season is on a knife edge with respect to rainfall and subsoil moisture,” he said.
“If there is limited rainfall through coming weeks, then hopefully conditions remain cool as crops ripen.
“The season could still go either way. Farmers are sitting on the fence as there’s still – but only just – time for some beneficial rain for crops. This latest survey signals a reset in expectations as we move through spring without significant useful rain on the outlook.”
While widespread winter rain eased seasonal pressures in many areas of the state, the crucial spring period – and how it would shape up – remained top of mind during the survey period.
Although fewer SA farmers were worried about drought, 45 per cent still cited it as their main concern, down from 60 per cent last quarter.
This follows a gradual easing of seasonal concerns throughout 2025, down from a high seen in quarter three last year, when SA farmers were heading into harvest following one of the driest years on record.
As seasonal worries eased, they were replaced with economic pressures, with a third of SA farmers (33 per cent) now concerned about the impact of falling commodity prices (was 16 per cent).
More SA farmers are also concerned about high input costs this quarter (39 per cent, up from 34 per cent last survey) and government intervention/policies (35 per cent, up from 28 per cent).
On the flipside, half of SA farmers surveyed (50 per cent) were hopeful that beneficial seasonal conditions would prevail over the coming 12 months, although this was down on the 62 per cent with that view last survey.
A similar number expected to benefit from rising commodity prices (51 per cent, down from 55 per cent).
There was also increased positivity around global trade dynamics, with 24 per cent of the state’s respondents expecting overseas markets/economies to deliver a positive effect (up from just five per cent last survey).
Mr Matthews anticipated there would be a high level of fodder conservation in the state.
“After the extended dry period we’ve come through – and some are still managing – livestock producers will be planning ahead to ensure they have sufficient on-farm fodder reserves to not get caught short again,” he said.
Grain producer sentiment declined this quarter, with only 22 per cent of SA growers anticipating conditions would improve over the next 12 months (from 25 per cent last survey).
Mr Matthews said this sentiment reflected global drivers, such as a price decline in Canada due to an above-average crop and tariff negotiations which are pushing canola prices down coming into the Australian harvest period.
Forward price indications for wheat, lentils and barley are also a lower level compared with the past five years.
Although below the five-year average, winter crop conditions in SA have improved the production outlook when compared to earlier estimates.
Mr Matthews said this yield potential would need to be supported by a cooler finish, especially as crop development is two to three weeks later than usual.
“Farmers won’t really know until they get the headers into the paddock how this year’s crop will stack up compared to what they budgeted,” he said.
“Though we expect to see more crops cut for hay this year, with the soft finish and a better price outlook for hay compared to wheat/barley grain.”