Dairy attracts limited outside investment an agribusiness banker survey shows SIMONE SMITH THE WEEKLY TIMES JULY 02, 2014 12:00AM BE THE FIRST TO RESPOND . . THE dairy industry has attracted “limited” interest from outside investment, according to an agribusiness banking survey. And there was a “subdued” sense of the likely growth in lending requirements, as farmers focused more on improving farm profitability and managing through the current business cycle. Fifty-eight per cent of respondents said they had received interest from farmers about investing in the industry, while 23 per cent said they hadn’t. Fifty-four per cent of bankers expected lending requirements to dairy farmers to increase, 4 per cent expected a decline and 42 per cent expected no change. The first survey of its kind was released last week and contacted 56 agribusiness bankers across Australia, representing 30-40 per cent of the market servicing the dairy industry. Research business Intuitive Solutions conducted the research and director Michael Sparks said it was a chance for a “fresher” perspective on how the industry is operating. Bankers’ confidence in dairy farm owners’ abilities ranged from 100 per cent for on-farm management of their operations to 23 per cent for staff recruitment and retention. The areas of budget planning and management of costs ranked 54 per cent and 58 per cent respectively, while 58 per cent were confident of farmers’ ability to adapt to a changing market. Export demand was the strongest supported part of the industry at 90 per cent, while profitability of farm businesses was at 66 per cent and confidence in business conditions in the sector was also at 66 per cent. On farm, 88 per cent of bankers were confident in farm business ability to service existing debts and 85 per cent were confident in dairy farm businesses cash-flow position. Only 58 per cent were confident with the debt position of individual dairy businesses. Dairy Australia farm business capability and farm profit and innovation manager Neil Lane said there was an acknowledged “gap in the industry” for business areas such as budget versus actual cash flow. He said most farmers didn’t start farming because they enjoyed budgets but it was something they needed to engage in.
Posted on: Wed, 02 Jul 2014 21:34:18 +0000
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