Victorian farmers remain upbeat about the year ahead, with the latest Rabobank Rural Confidence Survey showing farmer sentiment easing just slightly from last quarter's highs.
Strong commodity prices are the key driver supporting confidence. Seasonal conditions were also source for optimism for a proportion of the farmers surveyed.
However, with an El Nino weather pattern now officially emerging, the survey found two-thirds of the state's farmers were implementing a range of measures to lessen the potential impact of drought on their businesses.
The latest quarterly survey, completed a month ago, found Victoria's farmers were overall positive about their prospects for the coming year, albeit with the net confidence reading moderating from last quarter's high (of 26 per cent) to 16 per cent.
About a third (32pc) of the farmers reported they expected conditions in the agricultural economy to improve - down slightly from 39 per cent with that view in the previous survey. Those expecting conditions to deteriorate stood at 16 per cent (up slightly from 13 per cent), while the proportion of farmers expecting stable conditions remained at 46 per cent.
Beef producers were particularly buoyant about their prospects with prices at record levels, while grain grower sentiment remained firm in parts of the state on the back of autumn planting rains. Confidence lifted amongst dairy farmers, but slipped in the sheep industry to around neutral levels.
Rabobank state manager for Victoria Todd Charteris said the planets seemed to have lined up for Victoria's primary producers, with commodity prices trading at historic highs against the backdrop of low interest rates.
Mr Charteris said going forward, the season would be the key determinant of confidence.
"As it stands today, the season is favourable across much of the state and while the rain was late coming and a bit patchy, it has enabled farmers to get their planting program underway and put in their crops which appear to be generally in line with last year," he said.
North Western Victoria, however, remains dry, with confidence in the Wimmera and Mallee regions trailing most of the other regions.
Conversely, farmers in the High Country were the most upbeat, with confidence also strong in Gippsland.
Mr Charteris said across the state - regardless of current seasonal conditions - the survey showed 68pc of farmers had a proactive approach to drought preparedness.
"Farmers are employing a range of measures including storing feed or growing fodder, managing livestock numbers, investing in water infrastructure or utilising farm management deposits," he said.
"This is a positive indicator, particularly in the light of current weather forecasts."
Any concerns around an El Nino event weren't pronounced in the survey results, with seasonal conditions and commodity prices underpinning much of the positive sentiment this quarter.
