Victoria's farmers have held onto their positive outlook, despite concerns about input prices and conditions leading into harvest, the latest Rabobank Rural Confidence Survey has shown.
While overall rural confidence in the state eased back in the latest quarter, it remained at solid levels, underpinned by continuing strength in commodity markets.
However, cool and wet conditions running into summer, combined with workforce concerns and high input costs, appear to be contributing to the increase in those forecasting conditions to deteriorate.
The December survey found sentiment remained firm among beef and dairy producers, while there was no significant change in confidence among sheep producers.
Grain growers, however, were found to be largely behind the drop off in sentiment this quarter, with confidence among those in the sector well down compared to the September survey.
More than one in five Victorian grain growers surveyed reported a pessimistic outlook, expecting conditions to worsen over the year ahead.
Rabobank regional manager for southern Victoria, Deborah Maskell-Davies, said overall business conditions were very good across most regions in Victoria, with excellent commodity prices in most sectors keeping farmers positive about the year ahead.
She said seasonal conditions had been excellent for croppers and livestock producers in the north of the state, while in the northern Mallee near Swan Hill there had been less rain, but crops were still yielding well, and prices were well in their favour.
"Producer confidence across the state is still very good," she said.
"Livestock prices have assured good income levels, and rapidly-increasing land values, with record prices in nearly all sales, are boosting that confidence.
"It was a cool and grey spring, however, and grain and pasture growers are certainly looking for some consistently warm, sunny days to support final maturing of crops and good harvesting conditions later this month."
She said water allocations were looking good across the board which was shoring up longer-term optimism and investment certainty among irrigators.
This quarter's survey, completed last month, revealed 33 per cent of Victorian farmers surveyed expect better business conditions over the year ahead.
While this was in line with the 34pc with that view last quarter, the number expecting a deterioration in conditions has risen to 15pc, from 6pc last quarter.
Those expecting business conditions to remain stable stood at just below half at 49pc.
The survey showed Victorian farmers have been particularly buoyed by ongoing high commodity prices, with 82pc of those expecting conditions to improve citing prices as the key reason.
The state's grain growers were especially confident about the outlook for commodity prices.
Seasonal conditions were also a driver of confidence in the latest survey - cited by 55pc of those with an optimistic view on the year ahead.
However, this was down on the 71pc who were bullish about the season in September.
It found business confidence was firm among the state's beef and dairy producers.
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