CONFIDENCE among the nation's farmers has jumped to a four-year high as solid January rains, the falling Australian dollar and soaring beef prices bolster sentiment in the bush.
Rural lender Rabobank's quarterly confidence survey, which questions 1000 primary producers across the nation, found farmers have started 2015 in high spirits following the breaking rains at the start of the year.
"Good January rains over large parts of Queensland and NSW saw the cattle market ignite, with prices across all categories lifting to record levels," Rabobank group executive for country banking Peter Knoblanche said.
"This saw a flurry of restocker activity, which has since waned with the lack of follow-up rains but prices have held up strongly."
The Eastern Young Cattle Indicator, a measure of beef prices based on 26 eastern saleyards, has waned in recent weeks but is still close to all-time highs. At the same time, the Australian dollar has fallen from its 52-week high of US95c in July last year to about US77c, boosting the competitiveness of Australian agricultural exports.
The Abbott government has also won big concessions for primary producers in its free trade talks with China, Japan, and South Korea.
The Rabobank survey found farmer confidence at its highest level since March 2011, with a net positive reading of 32 per cent.
Confidence improved in all states and across all commodities, except for sugar, which is facing a slump in prices and a fight over how Australian sugar exports are marketed. Nearly half of the survey respondents said they expected conditions to improve over the coming 12 months and just 12 per cent expected a decline.
Optimism among farmers should drive solid on-farm investment and augurs well for demand for farm equipment and agricultural inputs such as fertiliser feed, and herbicides.
"Investment intentions also picked up across all states of Australia. Overall, 29 per cent were looking to increase their level of investment while 62 per cent were intending to maintain it at the same level," Rabobank said.
Almost 90 per cent of those surveyed expect their incomes to rise or stay at similar levels to last year, with beef, sheep and grain farmers the most optimistic.
The strong boost to farmer sentiment comes as Australian-listed agribusinesses soar. Crop protection group Nufarm has seen its shares surge 77 per cent to $7.16 in the past six months. Over the same period rural services group Elders is up 42 per cent and beef producer Australian Agricultural Company is up 18 per cent. East coast grains giant GrainCorp is up 12 per cent despite expectations that a small crop will hit its profits.