STRONGER commodity prices and good seasonal conditions across much of the state through summer have seen a significant improvement in sentiment among Victorian farmers, a quarterly Confidence Survey has found.

This upward trend, following a decline in the last quarter of 2023, is in line with strong farmer confidence seen along the east coast and into South Australia.

The quarter one Rabobank Rural survey, released today, found net rural confidence levels in Victoria have increased from -39 per cent last quarter to +21 per cent.

The latest survey, completed last month, saw the state’s rural confidence return to positive territory for the first time since June 2022 - with considerably more farmers reporting an optimistic view than pessimistic outlook on the year ahead.

Previous surveys saw confidence weighed down by concerns about rising input costs, heightened risk of foot and mouth disease (FMD), lumpy skin disease, falling commodity prices and El Niño forecasts and declarations.

The number of Victorian farmers who expect agribusiness economic conditions to decline in the year ahead fell from 52 per cent last quarter to 15 per cent.

Meanwhile, those farmers now taking an optimistic view of the year ahead increased to 36 per cent, from 13 per cent previously, while 44 per cent expect conditions to remain stable.

Of those farmers in the state who are expecting agribusiness conditions to improve, rising commodity prices (61 per cent) and good season (33 per cent) were the main drivers of optimism.

For those farmers expecting business conditions to decline, weak commodity prices (42 per cent) and rising input costs (32 per cent) were the main concerns.

Rabobank Southern Victoria and Tasmania regional manager, Deborah Maskell-Davies said while much of the state had enjoyed good seasonal conditions this summer, “it has not been without its challenges”.

“And since the survey was completed, we have seen major storm damage in the east of the state and extreme heat and fires have taken their toll in areas to the west of Ballarat,” she said.

“However, the turnaround in the seasonal outlook - from last year’s El Niño 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.”

The survey found Victorian sheep producers were shown to be the most optimistic of all the state’s farmers this quarter, with 61 per cent anticipating agribusiness conditions to improve in the year ahead - a major turnaround from 14 per cent holding that view last quarter.

Beef sector confidence in the state 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 were confident about the outlook for seasonal conditions.

Ms Maskell-Davies said Victorian beef producers were 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.”

Overall, this quarter, investment appetite has lifted among Victorian farmers, with more expecting to increase investment in their farming business (17 per cent, up from 11 per cent last quarter) and fewer farmers were now looking to decrease investment levels (12 per cent, down from 35 per cent previously).

Interest in property purchase eased slightly, with 27 per cent of the farmers who are intending to increase their investment levels planning to buy farmland (down from 32 per cent).

Farm income was expected to increase, with 29 per cent of the state’s farmers expecting incomes to increase (up from nine per cent previously), while 23 per cent of farmers expect incomes to decrease (down from 68 per cent).

The Rabobank Rural Confidence Survey questioned an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis.

The next results are scheduled for release in June 2024.