The quarterly survey revealed Australian farmer confidence had been buoyed by good seasonal conditions across much of the country and solid prices for many commodities.
Cotton and sugar growers were particularly bullish about the coming year, while sentiment remained strong in the sheep and beef sectors.
Meanwhile it was a mixed outlook for the nation’s grains sector, with many looking to harvest a sizable crop, before frost damage in Western Australia and excessive rainfall in parts of the eastern states hampered those expectations.
Rabobank national manager Country Banking Australia Todd Charteris said the confidence stemmed largely from favourable weather conditions.
“Much of the country is experiencing a good season, following the second wettest winter on record, and a wet start to spring,” he said.
Despite frost hampering harvest in WA and floods along the east coast, Australia’s grain producers were the biggest beneficiary of the rain, with many on the cusp of harvesting a sizable crop – particularly in Victoria and South Australia.
Charteris said the rain had also given the cotton industry a considerable boost, with 62 per cent of cotton producers expecting conditions to improve over the coming 12 months.
“The rain has not only spurred a large dryland plant this year, it has also shored up water availability for irrigators, which has facilitated the largest planting in five years – nearly double that of last year,” he said.
“The market is also looking favourable, with domestic prices now trading up around $500 a bale.”
Graziers were also buoyed by the season and strong market conditions, with 40% of beef and 35% of sheep producers expecting conditions to be better next year.
Much of the strong sentiment was driven by commodity prices; however the optimism in the market wasn’t shared by everyone in the industry.
“While the upside for grain prices is currently limited, thankfully the yields are there for many Australian farmers this year, which will help offset the low prices,” Charteris said.
The survey also showed dairy farmers were concerned by the pricing outlook, but on-farm profitability is expected to return in the 2017/18.
Australian farmers are also confident on the financial front, with 34% of respondents expecting an improved financial result next year.
Sugar and cotton producers were particularly positive about their income projections for the coming year, with 53% and 47% respectively anticipating a higher gross farm income.
Across the states, much of the upswing in confidence reported in Tasmania, Victoria and South Australia was driven by favourable seasonal conditions.
While there was a slight easing in confidence in New South Wales and Queensland, it remained historically strong, with farmers among the most positive in the nation.
Western Australia was the only state to report a material decline in confidence, which was attributed to frost damage to crops in early spring.
Areas in the state’s central and eastern Wheatbelt were hardest hit, with the state’s harvest now expected to be down by around 3 million tonnes.
Across all surveyed commodities, confidence remained embedded in positive territory, except dairy where the net confidence reading was slightly negative.
“While seasonal conditions have been behind some of the lift in dairy sentiment, it has largely been market-driven, with global commodity markets now in their recovery phase,” Charteris said.
But confidence levels are sky-high in the cotton and sugar sectors, as well as producers in the beef and sheep sectors.