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Future bright

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September 17, 2017

Good late-winter rainfall in the state has seen Victorian farmers retain their position as the most positive in the nation for the second consecutive quarter, the latest Rabobank Rural Confidence Survey has found.

Good late-winter rainfall in the state has seen Victorian farmers retain their position as the most positive in the nation for the second consecutive quarter, the latest Rabobank Rural Confidence Survey has found.

While the driest June on record saw confidence in Victoria’s agri-sector retreat from last quarter’s two-year high in the latest survey, the recent rain came just in time to curtail any negative impact on the state’s grain crop.

Dairy farmers also helped underpin the state’s positive rural sentiment, with better seasonal conditions and farm gate milk prices expected to support improved on-farm profitability.

The survey, completed last month, found while the net Victorian Rural Confidence index fell to seven per cent (from last quarter’s strong reading of 26 per cent), the majority of the state’s farmers (57 per cent) expected conditions in the agricultural economy to remain the same as the past 12 months.

A smaller proportion (24 per cent, from 34 per cent in the previous survey) expected conditions to improve, while those expecting the agricultural economy to deteriorate increased to 17 per cent (from eight per cent).

Rabobank’s Tasmania and southern Victoria regional manager Hamish McAlpin said with widespread rain falling in Victoria in early to mid-August, the turnaround in seasonal conditions might not have been fully captured in the survey.

‘‘After an exceptionally dry June, there was certainly an element of nervousness that winter could remain dry and downgrade the potential of the winter crop,’’ he said.

‘‘Thankfully August brought with it the much-needed rain, with most of the state recording at least an inch of rainfall, if not three to four inches, over a two-week period.’’

Across the state, grain producers were the most positive about their prospects, with 36 per cent of growers expecting agricultural economic conditions to improve and a further 61 per cent expecting similar conditions to last season.

‘‘The recent rains have consolidated on the fantastic start to the cropping season in autumn, with Victoria the only state on track to produce an above-average winter crop,’’ he said.

With the three-month outlook from the Bureau of Meteorology pointing to below-median rainfall for much of Victoria, Mr McAlpin warned that September and early October rainfall would be critical to ‘‘fulfil the potential of crops in the ground’’.

Confidence was also relatively strong in the dairy sector, with 37 per cent of the state’s dairy farmers holding a positive outlook for agricultural economic conditions in the current season.

In contrast to recent surveys, Mr McAlpin said confidence had waned in the beef and, to a lesser extent, sheep sectors.

‘‘The past 12 months have really been exceptional for graziers, with record prices, excellent seasonal conditions and lower input costs for fertiliser and fodder,’’ he said.

The overall financial health of Victoria’s agri-sector was reflected in gross farm income projections, with Victorian farmers more positive about their cash flow for the coming financial year compared with their counterparts in other states.

The next results are scheduled for release in December.

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