Good winter rain and expectations of a good season are driving confidence in dairy farmers across the country.
Strong farm gate milk prices, combined with a major turnaround in seasonal conditions in many regions, was supporting confidence among producers.
In Victoria, sentiment in the key dairy areas remained upbeat, with 60 per cent expecting little change in agricultural economic conditions, while one-in-five were forecasting an improvement.
By region, sentiment had dipped in every part of the state except Gippsland, where dairy prices and excellent winter rain have combined to bolster optimism in an area that has experienced both drought and bushfires in recent times.
Rabobank southern Victoria regional manager Deborah Maskell-Davies said the season was well set up.
“Good milk prices and a great hay and silage season last year are positives for dairy farmers in west and south Gippsland, however after a wet winter, there is some concern about managing a wetter-than-expected spring over coming months,” she said.
Farmers in south-west Victoria reported the most pessimistic outlook for the season ahead.
Dairy farmers were positive about their income prospects with 32 per cent anticipating a stronger financial result in the 2020-21 financial year.
Ms Maskell-Davies said there was considerable infrastructure building under way to boost drought resilience and preparedness, with new dairy barn construction a noticeable trend.
Expansionary interests were most prevalent in the dairy sector, with 26 per cent of dairy farmers intending to increase investment in their business.
Of these, more than half had earmarked investment for additional property purchases.
“The Victorian rural property market is incredibly strong and many farmers are expressing interest in expanding their operations, particularly in terms of drought-proofing enterprises with property in reliable rainfall regions,” Ms Maskell-Davies said.
It was a similar story in NSW, with sentiment slightly down on last quarter but remaining strong due to robust prices and an expectation among 39 per cent of dairy farmers surveyed that economic conditions would improve over the coming year (compared with 59 per cent in the previous quarter) and 53 per cent expecting little change in conditions.
Investment was at front of mind for many of those producers, with 48 per cent looking to increase investment in their farm businesses over the coming year.
Dairy farmers in Tasmania are the most optimistic in the face of external pressures, with 44 per cent of those surveyed looking to an improved year ahead.
Rabobank's Tasmanian manager Stuart Whatling said farmers across the state were generally very optimistic about the spring season ahead thanks to good winter rain, especially in June and August.
He said many farmers were reporting conditions “as green as they have seen” for at least the past four or five years, with even producers along the east coast region reporting unseasonably warm and wet conditions throughout winter.
Meanwhile dairy sentiment was shown to be soaring, with the sector posting strong upswing in confidence this survey.
In total, 44 per cent of Tasmanian dairy farmers were expecting an improvement in business conditions over the coming year and a further 44 per cent expecting little change to current conditions.