The autumn break has brought green shoots of farmer confidence, especially among dairy farmers, according to the latest Rabobank Rural Confidence Survey.
Although they remain in the minority at just 31 per cent of Victorian farmers, the percentage positive about the agricultural economy over the coming 12 months grew from only 23pc in the previous quarter.
Two-thirds of those optimistic farmers said seasonal conditions were key to their outlook.
Even so, more Victorian farmers at 39pc believed conditions are likely to remain similar to last year, while 22pc expect them to worsen.
Rabobank regional manager for Southern Victoria and Tasmania Hamish McAlpin said despite good rainfall for most areas after the late autumn break, spring rainfall would be critical, with low soil moisture levels at depth following "the extended dry" in many parts of the state.
"With the Wimmera and Mallee receiving virtually no summer rainfall, follow-up falls will be needed to deliver solid yields," he said.
"But it is certainly a good start, with crops starting to emerge well."
The heaviest of the falls, he said, were north of the divide, particularly in the upper north-east regions around Corryong and the Kiewa Valley.
"This has seen the catchments for the Murray and Goulburn systems start to wet up and has alleviated the need for temporary water - which spiked around $640 a megalitre a few weeks ago and is now trading around $550ML - but many rain events will be needed to fill the catchments," Mr McAlpin said.
Although from a low base of just 28pc in the March quarter, the biggest lift in confidence was reported in the Goulburn Murray region, with 58pc of surveyed farmers there expecting conditions to improve.
Mr McAlpin said this improvement in sentiment had also been driven by the region's dairy producers, with "competition for milk intensifying as processors try and cover supply shortages out of an already depleted milk pool."
"And it is this competition, together with stronger global fundamentals, that has driven expectations for full-year prices in the 2019/20 season to close at record high levels, with some dairy producers locking in multi-year contracts at elevated prices," he said.
Mr McAlpin said while there was good evidence of a stronger milk price next season, headwinds remained in the form of high feed and water costs.
This was reflected in the survey, he said, with 36pc of dairy respondents expecting their prospects to improve (up from 18pc), but 33pc expecting a similar outcome to last year, and 30pc believing conditions could worsen.
Across other commodity sectors, the survey found grain growers to be the most positive about the coming 12 months, while sentiment improved among beef and sheep graziers.
"Through south-west Victoria and west Gippsland, many farmers started the year with good hay and silage reserves," Mr McAlpin said.
"However, reserves have dwindled over the last few months with a later than usual break.
"For those further north that missed a spring and didn't get an opportunity to conserve feed, the sourcing and availability of feed remains challenging."
Mr McAlpin said while the autumn break had come late, some farmers had been able to get a feed wedge before winter.
"Pasture growth has also been helped by the mild weather we experienced before it turned cold in late May, although the feed wedge is not as big as usual," he said.
"But it remains desperately dry in east Gippsland, with much of the region looking for significant rain through winter and spring to bring much-needed relief."
While sentiment in Victoria's farming sector improved this quarter, the appetite for investment remained unchanged, with 66pc intending to maintain current levels and only 18 planning to increase investment.
"We are seeing stronger investment in regions that enjoyed a good season last year, like the Western District, but in other areas, such as the Mallee, expansion intentions have generally been put on hold after two tough years," Mr McAlpin said.
"While in the Wimmera, properties are still fetching good returns, and pushing records in some cases, appetite for expansion is mixed with last year's frost-damaged crop putting a dampener on investment plans."
The Rabobank Rural Confidence Survey questions an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis.