Another major bank says coronavirus isn't hurting confidence in Australian agriculture with many farmers looking to borrow to boost their businesses.
In its just-released July agribusiness update Rabobank said the farm sector, unlike most other parts of the national economy, was sailing relatively smoothly through the COVID-19 pandemic storm.
And now the Commonwealth Bank has endorsed that view, saying the outlook for many parts of rural industry was strong and growing.
"There's optimism and appetite for investment in the sector and supporting agribusiness will be essential to growing the economy," the Commonwealth Bank's executive general manager for regional and agribusiness, Grant Cairns, said.
Australian agribusiness was experiencing opportunities across many sectors that had not been seen for years with favourable market conditions, good seasonal conditions in most regions and a consumer focus on fresh produce, he said.
Mr Cairns said many agribusinesses, particularly in the southern states, had been seeking new funding over the past few months for working capital to expand, restock, sow crops, diversify their businesses, or invest in new machinery and technology to improve productivity.
"Many producers are looking to replace their older equipment and take advantage of the Federal Government's investment allowance and the favourable seasonal conditions," he said.
"Ag machinery financed through our asset finance team has seen an increase of 27 per cent year-on-year and three of the last four months have posted the strongest volumes of new asset finance business that we've seen in the past two years.
"Our regional and agribusiness banking team recently held a live webcast attended by almost 200 farmers and the sentiment was resoundingly positive," Mr Cairns said.
"They're keen to know how to protect themselves against some of the global market challenges but importantly they're very interested in capitalising on current opportunities."
Mr Cairns said a growing consumer interest in the origins of food also represented a significant opportunity for agribusinesses to consider different products and new ways to take them to market.
"With a recent focus on food security and supermarket shortages, a light has shone on agriculture's status as one of the most critical pillars of our economy.
"Our data is telling us that spending at supermarkets and grocery stores has been consistently (each week) running about 25pc higher throughout May and June and even the first week of July (because of coronavirus lockdowns) compared with this time last year. I think this represents a real opportunity for the agriculture sector."
"We've heard from many growers who see this change as an opportunity to rethink the old ways of working and consider new business models that might include consolidations, diversification and even collaborations with other producers to meet changing market demand and consumer preferences, and explore where their next opportunity might come from," Mr Cairns said.
For example, Hussey and Co, a Victoria-based business which grows, packages and supplies gourmet baby salad leaf mixes for food service and retail sectors across Australia and internationally, has invested heavily in acquiring farms in different regions to support year-round supply.
The business sells into supermarkets, airlines and the foodservice sector across a global market. Revenue came from a 50:50 split between food service and retail. So when coronavirus arrived, sales dropped by 40pc almost immediately.
"Because every part of the business is highly measured, we could watch what was happening and implement changes," owner Jeremy Haw said.
Business data showed that a lot of the 1.5kg boxes of leaves they had been selling into food service were now going to greengrocers.
Instead of continuing to supply the bulk packs Mr Haw worked with the grocers and their agents to supply flow wrap boxes - cartons of smaller portions ready for sale.
He also introduced a new 500g salad bag for door-to-door delivery services which had grown dramatically in the past few months.
"We've now recovered 50pc of the lost sales," he said.