Stronger commodity prices and seasonal conditions have been the cause for farmer confidence in Victoria to rise by nearly 60 per cent, a new report says.
The Rabobank Rural Confidence Survey for quarter one, released today, showed Victoria's net rural confidence levels went from -39 per cent to +21pc, into positive levels for the first time in about 18 months.
The survey has results from 1000 primary producers across a wide range of commodities and geographical areas.
The survey claimed stronger commodity prices and good seasonal conditions in Victoria, over summer, led to "significant improvement" in farmer sentiment.
The state's rural confidence returned to positive numbers for the first time since June 2022.
Rabobank's previous surveys showed confidence was affected by concerns of rising input costs, risk of disease, El Nino forecasts and falling commodity prices.
Victorian farmers expecting agribusiness economic conditions to decline in the year ahead dropped from 52pc past quarter to 15pc.
Thirty-six per cent of farmers are now optimistic for the year ahead, from 13pc, and 44pc expect conditions to remain stable.
About 61 per cent of the optimistic farmers said rising commodity prices and a good season were main drivers for their optimism.
Farmers who expected business conditions to decline, 42pc attributed their concerns to weak commodity prices and 32pc claimed rising input costs were main concerns.
Rabobank regional manager for southern Victoria and Tasmania Deborah Maskell-Davies said since the survey was completed, farmers had experienced major storm damage in the east, along with heat and fires in western Victoria.
"However, the turn around in the seasonal outlook - from last year's El Nino forecasts - coupled with the expectation that the livestock market had bottomed out last year and the subsequent improved commodity prices, has seen a notable rise in farmer sentiment," she said.
Victorian sheep producers were the most optimistic, with 61pc expecting agribusiness conditions to improve this year, 14pc higher than the previous quarter.
"The large volume of livestock that hit the market last year, coupled with the dry outlook led to sheepmeat prices falling to some of their lowest levels in over 10 years," Ms Maskell-Davies said.
Most Victorian dairy producers surveyed believed agirbusiness conditions would be unchanged.
"Farmers are receiving strong prices for their milk, with many locking in on two- or three-year contracts," she said.
"And while global dairy prices may have bottomed out - the Australian market is insulated from that. Domestically we have a growing market, with dairy processors chasing milk to secure supply.
"As a result, Victorian dairy farmers are seeing good farmgate returns."
Beef sector confidence in the state has experienced a significant increase in the first quarter of 2024, with 40 per cent expecting the agricultural business conditions to improve in the coming year (up from 16 per cent in the previous quarter).
Of these, over half (55 per cent) cited rising commodity prices as the key reason for their optimism, while 41 per cent are confident about the outlook for seasonal conditions.
Ms Maskell-Davies said Victorian beef producers are pleased to see the cattle market recovering, after a difficult 2023. "And strong competition - better than anticipated - for young cattle at recent weaner sales is hopefully a positive market signal," she said.
The survey found confidence among Victorian grain growers to be relatively stable.
"The state's grain growers enjoyed an above-average harvest last year, with reasonable yields," Ms Maskell-Davies said.
"The summer crops and irrigated crops are looking really good at present. And there has been enough summer rain to keep grain growers' moisture strategies in place, ahead of planting the winter crop."
The survey claimed farmers looked to increase investment in their farming business, from 11pc to 17pc, and fewer farmers looked to decrease, from 35pc to 12pc.
Meanwhile, 27pc of those planning to increase investment, planned to buy farmland.
Other Victorian farmers looking to invest, but in farm infrastructure, grew from 49pc to 61pc.
The next survey results will be released in June.
