The latest six-monthly Commonwealth Bank of Australia Agri Insights survey indicated a jump in confidence across most sectors, with the horticultural and sugar farmers experiencing the greatest increases in confidence.
The survey, taken in January and February, showed 16% of horticultural producers intended to increase production in the coming year, compared with just 2% of producers predicting growth six months ago.
For sugar cane farmers, 22% said they would expand production this year, up from just 7% six months ago.
Overall, dairy farmers remained the most confident, with 25% expecting to increase production despite milk prices remaining relatively low.
Six months ago, 18% of the nation’s dairy farmers said they would expand.
The biggest loser was the cotton industry, with 51% of producers saying they expected to decrease production.
Six months ago, only 10% of cotton farmers were expecting to decrease their crop output.
Summer grain was the most confident sector six months ago, with 25% expecting to boost production but that had now dropped to 13%.
CBA’s regional and agribusiness banking general manager Darryl Mohr said access to global markets was the key to the investment intentions of farmers in many sectors.
Mohr said the exportable nature of horticultural produce meant farmers were expecting to meet growing offshore demand for their products.
The free-trade agreements recently signed between Australia and China, Japan and South Korea had given horticultural producers a strong signal that markets were more accessible.
In the dairy sector, Mohr said there was a “tremendous focus on offshore potential for dairy products”.
“We are seeing the scale of the dairy continuing to grow,” he said.
“With dairying in Victoria being pasture-based, there is an increase in the size of dairy herds.
“So farmers are buying additional land.”
The CBA survey also showed farmers across Australia were willing to employ more people.
Nationally, 5% of farmers intended to increase the number of employees — an increase on the 1% recorded six months ago.
