Federated Farmers Banking Survey Report 2019
This report is from Federated Farmers November 2019 Banking Survey, a six-monthly barometer for farmers’ views on their banking relationships.
Key summary
- Most farmers remain satisfied with their banks, but farmers’ satisfaction with their banks continues to decline. Satisfaction has slipped from 71% in May to 68% in this survey, the lowest since the survey began in August 2015. Contrary to this trend, sharemilkers satisfaction with their banks increased over the past sixth months.
- Most farms (81%) have a mortgage and this stabilised over the past six months. Like previous surveys, dairy farms (88%) are more likely to have mortgages compared to non-dairy farms (73%). Although most farm groups had a small decrease in the percentage of farms with a mortgage, ‘other’ farm groups had an increase in the percent of farms with a mortgage (up by 3.4 percentage points)
- Over the past six months, the average farm mortgage has increased modestly, although non-dairy farms are the only group to see an increase in mortgage amounts. Dairy farms continue to have the largest mortgages, and the most between $2 and $20 million.
- The current average mortgage rates have decreased since May 2019 (by 0.4 percentage points). Sharemilkers interest rates are now only marginally higher compared to other farm types.
- Most farms (81%) continue to have on overdraft facility, averaging $214,000. This is a $10,000 decrease since May 2019. Non-dairy farms continue to have the largest overdraft facilities (average of $230,000) and sharemilkers the smallest (average of $89,000).
- Again, there has been a substantial increase in perceptions of bank pressure, with 23% of farmers perceiving they have come under undue pressure, up 7 percentage points on May 2019. Dairy are feeling this particularly with just under 30% feeling under pressure.
- Almost 23% of farmers feel increased pressure from their banks compared to six months ago, although most farms feel the pressure has remained the same.
- Satisfaction with bank communication continues to be stable, although slowly declining since August 2017. Sharemilkers rate their quality of communication the highest of all farm groups.
- Although 60% of farmers have up-to-date budgets for the current 2019/20 season, less than one quarter of farms have an up-to-date budget for the future season. This may reflect the timing of this survey, which was seven months prior to the start of the 2020/21 season. Compared to 12 months ago, in November 2019 more farms have an up-to-date budget except Meat & Wool farms.
For more - see the full report on this page