Many respondents were complimentary about their banking relationships, but others highlighted the size and speed of interest rate increases on top of continued concern about banks’ tough lending policies for rural purposes.
“Also mentioned was less frequent communication, bank branch closures and consolidation of rural staff into larger centres more remote from rural areas, high turnover of bank staff and staff having less understanding of farming,” Langford said.
Arable farmers were the most satisfied of industry groups, while sharemilkers were the least satisfied, with barely half saying they were very satisfied or satisfied.
Twenty-four per cent of farmers perceived they had come under undue pressure from their banks over the past six months, up six points from November.
All industry groups had higher proportions compared with six months ago and all were over 20 per cent. Dairy farmers felt the most under pressure and meat and wool farmers felt the least pressure.
Forty-four per cent of farmers felt their mental wellbeing had been affected by their debt levels, interest rates, changing condition, or other forms of pressure, up three points from six months earlier.
Feds suggested reinvestment in extra customer service at this time, Langford said.
“With banks making healthy profits, we don’t want them to be forgetting our rural communities.
“When times are tough, good communication is even more important, but our May survey shows farmer satisfaction on that front has slipped a bit more, continuing the decline of the last five years.”
Other key results from the Federated Farmers survey
- 79 per cent of farmers said they had a mortgage, up two points from November. Over the past six months, the average farm mortgage value has increased from $4.19 million to $4.31m while the median increased from $2.5m to $2.8m.
- The average mortgage interest rate increased from 6.29 per cent to 7.84 per cent, up 155 basis points since November (and up 405 basis points since its lowest point in May 2021). Sharemilkers had the highest average of 8.41 per cent.
- Overall, 2.1 per cent of farmers were paying a mortgage interest rate of less than 5 per cent, down from 10.1 per cent in November (and from a peak of 91.5 per cent in May 2021). Meanwhile, 1.8 per cent were paying a rate higher than 10 per cent, compared with 0.3 per cent in November.
- 74 per cent of farmers had an overdraft facility, a little higher than in November.
- The average overdraft interest rate increased from 8.59 per cent to 10.07, up 148 basis points since November (and up 379 points since its lowest point in November 2021). Dairy had the highest average of 10.49 per cent.
- Only 0.3 per cent of farmers were paying an overdraft interest rate less than 5 per cent, almost the same as in November (and down from a peak of 20 per cent in November 2021). Meanwhile, 35 per cent were paying more than 10 per cent, up from 14 per cent in November 2022.
- More farmers had budgets compared to six months ago. This reflects tougher times financially from falling incomes and rising costs. 68 per cent of farmers had an up-to-date budget for the 2022-23 season and 41 per cent had an up-to-date budget for the upcoming 2023-24 season. Both are record highs since the survey began in 2015.
