Australian farmers have an increased appetite to invest in their businesses in 2026, the latest Rabobank Rural Confidence Survey has found
The 2025 quarter four Rabobank Rural Confidence Survey has been released, finding 75 per cent of Australian farmers are expecting operating conditions to either improve or hold steady over the next year.
This is despite a dip from the previous quarter in overall net rural confidence – primarily due to concerns about rising business costs and weather uncertainty.
Rabobank group executive for country banking Australia Marcel van Doremaele says Australian farmers overall reported an increased appetite for investment this quarter with 33 per cent reporting they are intending to increase the level of spending on their farm business in 2026 – up from 29 per cent in the last survey – while 55 per cent plan to maintain current levels of investment.
Almost half (48 per cent) of the farmers surveyed expect conditions in the agricultural economy to remain stable in the year ahead – an increase from the 41 per cent which held this view in quarter three.
A further 27 per cent are anticipating an improved outlook for agriculture in 2026, although this is down from the 35 per cent which held this view in the previous survey.
The survey shows national rural confidence sits at net six per cent, a decrease from 14 per cent in the previous quarter, with high input costs remaining the leading concern for farmers – cited by 37 per cent, while drought was still a worry for 33 per cent.
A total of 24 per cent were worried about the impact of falling commodity prices on their businesses, particularly grain, cotton and sugar cane growers.
“After a period of volatility – especially from a seasonal perspective – farmers are shifting their expectations towards greater stability in 2026, with nearly half anticipating it will be ‘business as usual’ in the year ahead,” van Doremaele says.
“Despite some decline seen in the net national confidence index this quarter, the underlying sentiment remains resilient with most taking a measured view and balancing challenges with opportunities.
“Input costs, drought concerns and softer commodity prices continue to weigh on outlook, but these challenges haven’t shaken farmers’ broader confidence.”
States
While confidence eased across most states and commodity sectors, Victoria bucked this trend with farmer sentiment continuing to track higher – sitting at a net index of 24 per cent, up from 21 per cent, which is the highest since 2021.
The report states this is primarily due to expectations of a strong season and encouraging conditions in several regions.
“More stable seasonal conditions provide confidence to think more strategically about the future, and this is showing up in stronger investment sentiment in Victoria this quarter where a third of farmers are planning on increasing investment in their business,” van Doremaele says.
Tasmanian farmers maintained their position as the most confident in the nation despite a slight dip from 34 to 31 per cent.
Only five per cent of Tasmanian farmers expect conditions to worsen in the coming year, with the majority remaining optimistic about the outlook for commodity prices.
“The operational diversity and ongoing investment in irrigation infrastructure on many Tasmanian farms provides stability in the face of seasonal and market variability,” van Doremaele says.
Commodities
Nationally, grain growers were the only commodity group where sentiment ticked up this quarter. Rising input costs remain the top concern, but expectations for seasonal and price improvements are still broadly supportive of sentiment.
Sheep producers were the most optimistic of all Australian farmers, despite a fall in net confidence from 31 to 24 per cent this quarter.
“It’s been a cracking year for sheep producers, with prices continuing to bounce around at high levels,” van Doremaele says.
“Wool producers also have cause for ongoing optimism, with prices continuing to hold well for most categories.”
While beef producers remain the most confident of all commodity sectors, sentiment in this sector softened from 27 per cent in the previous quarter to now sit at net 16 per cent, with seasonal conditions being the main concern.
Van Doremaele says it was “a bit unexpected to see beef confidence fall, as the broader global demand picture continues to support the sector”.
“Australian cattle prices are holding across most categories and even lifted through November thanks to rainfall in strategic areas supporting a more optimistic producer market,” he says.
“From an export perspective, even though the removal of US tariffs on Brazilian commodities is anticipated to push more Brazilian beef into the United States, the strength of US demand is expected to continue to drive demand for Australian product and support pricing.”