A recent report from the Westpac and Charles Sturt University Agribusiness index revealed that agribusinesses were affected by rising operating costs, the high rate of the dollar and a poor wine season.

According to Westpac state general manager Richard Hockney these all contributed to a sharp decline in the overall economic performance of agribusiness across SA in the June quarter. Operating costs in the state rose to the highest level since the September 2008 quarter.

Australian agribusinesses performance was slightly lower than in the March quarter and business confidence fell to 69% lower than 76% last quarter and lower than that of last year.

Despite the rising costs South Australia still recorded the highest level of business confidence among the states at 84%.Producers reported the lowest level of business confidence at 65% while the Downstream sector showed a slight increase in confidence with 82%.

"Agribusinesses in South Australia recorded the second best economic performance in Australia," said Mr. Hockney.

The survey also revealed that the agribusiness industry remained confident about the future. According to survey co-coordinator Tom Murphy business confidence was a little lower than the 86 percent in the March quarter.

Confidence in the industry is high due to good seasonal conditions and feed availability although several factors also contributed to the slight dip in business confidence.

Australia's overall EPI rose to +0.04 in the quarter, slightly lower than the +0.05 in the March quarter and well below the +0.12 recorded in the September quarter of 2010. New South Wales was the best performing state for the quarter with an EPI of +0.11 while Queensland and Western Australia showed negative performance with -0.04 and -0.09 respectively.