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5 October 2007

Positive agribusiness outlooks cool with poor winter rainfall

Disappointing winter rainfalls have restricted agribusiness owners from capitalising on an increasingly positive global environment, according to the Spring Regional Economic Report from Westpac's Senior Agribusiness Economist, Justin Smirk.

Mr Smirk said while high commodity prices looked set to continue and Australian producers were well positioned in North Asian, Russian and Middle Eastern markets, a dry end to the winter season had downgraded farmers' initial enthusiasm for immediate performance lifts.

"This is the point in time when farmers will be going through a difficult patch and this report highlights how frustrating current conditions have become," Mr Smirk said.

"Overall there are reasons to support our confidence in the industry's resilience. There are excellent opportunities for producers, especially those in the livestock and grains industries, but dry conditions will moderate any forward plans.

"While Queensland beef producers are dealing with rising fodder costs and competition from US producers in Korea, they are in the middle of a solid growth period. Victorian dairy farmers will also be able to capitalise on good global demand when they can increase their production output."

Graham Jennings, Westpac's Chief Executive Regional and Agribusiness Banking, encouraged agribusiness owners to talk about their drought response strategies for the summer season with their bankers.

"It will be a tough summer for many farmers. However, by seeking out appropriate financial advice farmers can stem some of their immediate pressures and focus on their longer-term prospects," Mr Jennings said.

"Westpac's drought relief package may assist farmers in relieving some of their financial burdens. Agribusiness customers may be eligible for carry on finance, fee-free loan restructuring, credit card payment deferrals, no penalties on withdrawing term deposits early and up to three months suspension on home loan repayments."

Mr Jennings said farming families were also under significant emotional, not just financial, pressures. Earlier this year, Westpac introduced, with Davidson Trahaire Corpsych, a free and independent counselling service for its customers, to help them cope with stressful personal circumstances.

"Westpac is dedicated to helping re-build Australia's agricultural sector and farmers' production capabilities. We see long-term positives in the industry and we are committed to being here for the long haul," Mr Jennings concluded.

Westpac's Regional Economic Reports, distributed quarterly to Westpac's agribusiness customers, examine broad trends and economic forecasts for agribusiness industries and provide Westpac customers with the insights they need to plan for long-term business viability.

With more than 500 staff in Regional and Agribusiness banking, including a team of 150 skilled and experienced Agribusiness specialists, Westpac is committed to understanding its customers and delivering the right solutions for Australian agribusiness owners.

For more information call your local Westpac Agribusiness Banker on 1300 134 979 or enquire through your nearest branch.