A big season, with irrigation water aplenty, is sustaining farmer confidence at historically high levels, despite lacklustre cereal grain prices.
Even dairy farmers are smiling, a bit.
Cotton and sugar producers are particularly bullish about the year ahead, while sentiment is holding strong in the sheep and beef sectors says farm sector lender Rabobank.
NSW and Queensland farmers are the nation’s most positive, according to Rabobank’s latest rural confidence survey.
Dairy farmer enthusiasm has seen the biggest turnaround on the back of a slow global recovery in commodity markets.
Recovering from a four-year mood low, dairy farmers were still worried by the price outlook, but the survey found concerns were less pronounced as the year wrapped up.
Respondents said the 2017-18 season finally looked likely to deliver a return to farm profitability.
The better dairy outlook and favourable seasonal conditions have driven confidence gains in Tasmania, Victoria and South Australia, however sentiment has dipped in Western Australia where frosts have hurt crop yields.
Many in the grainbelt are in the throes of harvesting a sizable crop, but expectations have been reined in by frost damage cutting the WA crop by 3 million tonnes and excessive rainfall causing waterlogging in parts of the eastern states.
After posting a significant upswing last quarter, the net rural confidence indicator held its strong levels, with 36 per cent of farmers continuing to expect agricultural economic conditions to rise and only 15pc tipping the situation to worsen in 2017.
The majority (46pc) expect the next 12 months to be similar to the last.
About 92pc of the nation’s farmers plan to increase or maintain their level of farm business investment in the next 12 months – up slightly from 90pc in the previous quarterly survey.
Rabobank’s Country Banking Australia manager, Todd Charteris, said confidence in the agri sector remained strong, underpinned by good seasonal conditions across much of the country and positive market fundamentals in the meat, fibre and sugar sectors and increasingly dairy markets too.
”Much of the country is experiencing a good season following the second wettest winter on record, and a wet start to spring,” he said.
Grain producers had benefitted most from the rain, with particularly big crops likely in Victoria and South Australia.
However, rain was excessive in northern Tasmania and parts of NSW and Victoria, causing pastures and crop waterlogging leading to some significant downgrades to crop yields.
“Thankfully the yields are there for many Australian farmers this year, which will help offset low grain prices,” Mr Charteris said.
Record global stockpiles continue to burden grain price prospects.
Rain, and improved water storage levels, have revived cotton industry prospects noticeably, with 62pc of producers expecting better conditions in 2017.
”The rain not only spurred a large dryland plant this year, it has shored up water availability for irrigators which has facilitated the largest planting in five years - nearly double that of last year,” Mr Charteris said.
“The market is also looking favourable, with domestic prices now trading up around $500 a bale.”
Good seasonal conditions and strong markets had 40pc of beef and 35pc of sheep producers expecting a better year ahead.
Farmers generally retained an optimistic view on the performance of their own farming business, with 34pc expecting better financial results next year and 46pc believing their incomes would be relatively unchanged
Sugar and cotton producers were most positive, but income projections were pared back in the grains sector, although most still expected incomes to be stable or even improve.
Meanwhile, 34pc of farmers hope to boost their skills and knowledge, particularly through better on-farm management practices.
About 75pc wanted to increase knowledge around maximising crop and livestock productivity, while 57pc were interested in information on emerging technologies.