VICTORIAN rural confidence has lifted again this quarter on the back of an improved season around the state, a survey shows.
Confidence levels are now in positive territory for the first time in more than 12 months, the latest quarterly Rabobank Rural Confidence Survey shows.
More of the state’s farmers are expecting conditions to improve in the next 12 months than those expecting them to worsen, it says.
After being the lowest in the country in the last survey period, Victorian rural confidence is now the highest and is the only state where sentiment improved this quarter.
The latest survey – taken about a month ago – found 35 per cent of Victorian primary producers now expect the agricultural economy to improve, compared to 23 per cent in the previous survey.
Twenty-five per cent of farmers expect the agricultural economy to worsen in the next 12 months, down from 34 per cent last quarter and 44 per cent the previous survey.
The survey monitors outlook and sentiment in Australi's rural industries and questions an average of 1200 farmers across a wide range of commodities and geographical areas throughout the nation on a quarterly basis.
Rabobank state manager for Victoria Mark Bennett said most of the state's farmers were well placed to capitalise on a favourable winter growing season.
"Conditions have been good in most areas throughout the growing season with crop production expected to be significantly above that achieved last year in many areas,” he said.
“However since the survey was undertaken, significant rainfall has caused harvest delays and has the potential to reduce grain quality which is a real concern.”
Mr Bennett said livestock producers had fared well, with pastures around the state in excellent condition.
Of those Victorian primary producers surveyed who expected conditions to improve in the next 12 months, 40 per cent cited "improved seasonal conditions" as a key contributing factor.
Confidence in all sectors is now in positive territory with the exception of beef producers, where sentiment is extremely weak.
The poor export demand for beef, exacerbated by the stronger Australian dollar, has seen a declining outlook among cattle producers.
Mr Bennett said dairy producers have gone from being the least confident in the past few surveys to the most optimistic of all the main industries.
The improvement in international dairy prices in the past few months, together with the favourable seasons, had resulted in the surge in confidence.
“Dairy farmers also have the opportunity to benefit from lower grain prices and for irrigators the potential of increased water allocations,” Mr Bennett said.
The survey found that of those Victorian producers who expected conditions to decline in the next 12 months, 73 per cent believed the stronger Australian dollar would be a key contributing factor.
Seasonal conditions were mentioned by only 20 per cent of respondents as having a serious negative impact.
