VICTORIAN rural sentiment has staged a strong rally, with the state’s farmers now among the most confident in the nation, the latest Rabobank Rural Confidence Survey has found.
Dairy farmers were behind much of the upswing, with 45 per cent expecting conditions to improve on the back of strong milk price signals – with record high opening prices – and improving seasonal conditions in the southern dairy regions.
Across the state, the latest survey found 37 per cent of farmers have a positive outlook on the agricultural economy in the coming 12 months, up from 31 per cent with that view in the previous quarter.
Of those with an optimistic outlook, 65 per cent cited seasonal conditions as a key reason for their view, while commodity prices were nominated by 53 per cent.
Just 16 per cent of Victorian farmers surveyed were anticipating a deterioration in the agricultural economy (down from 22 per cent previously), while 39 per cent expected no change.
Rabobank regional manager for Southern Victoria & Tasmania, Hamish McAlpin, said good winter rainfall, consolidating on the state’s late autumn break, was behind much of the prevailing positivity, particularly among the state’s grain growers.
But Mr McAlpin said it was the state’s dairy producers who had posted the strongest upswing in sentiment – with dairy confidence now outstripping other surveyed commodities.
“Most dairy regions in southern Victoria have benefited from good winter rainfall, but it is the strong price environment that has driven the rebound in confidence,” he said.
With lack of milk and latent capacity in the processing sector driving record high opening milk prices, Mr McAlpin said this was starting to feed into business bottom-lines, with 65 per cent of dairy farmers expecting a higher gross farm income in 2019/20 than the previous financial year.
“We are also starting to see this flow into investment intentions, with 22 per cent of dairy farmers looking to increase their investment in the coming year by upgrading ageing infrastructure, rebuilding herds or buying next door,” he said.
In the livestock sectors, Mr McAlpin said, confidence had improved among the state’s beef producers, with 41 per cent expecting an improvement in conditions (up from 26 per cent).
Meanwhile, sentiment in the sheep sector had waned, with 16 per cent expecting an improvement (down from 24 per cent), although 57 per cent were still expecting a continuation of current conditions.
“While graziers benefited from the late autumn break, many continue to feed their stock, as there are patches around the state that remain very dry,” he said.
“East Gippsland has had some rain events over winter, but it has been far from drought-breaking and there are parts that have missed the rain altogether.”
A comprehensive monitor of outlook and sentiment in Australian rural industries, 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.