Strengthening commodity prices have made Western Australian farmers the most confident in the nation, with nearly two thirds of the state's primary producers expecting the agricultural economy to improve over the next year, a survey says.
The latest Rabobank Rural Confidence Survey showed 64 per cent of WA farmers expected conditions to improve, up from 31 per cent in the previous quarter.
Just 14 per cent of WA farmers said they expected economic conditions to worsen over the next year, down from 41 per cent last survey.
Rabobank WA state manager Crawford Taylor said 51 per cent of respondents expecting improved conditions nominated rising commodity prices as a major contributing factor.
"The commodity price outlook appears very positive for key grain and livestock sectors and this is certainly the main driver of confidence," Mr Taylor said.
"Of course high commodity prices are only useful if you can take advantage of them, so rainfall will play a big part in impacting longer-term sentiment."
The survey revealed dairy farmers are the least confident sector, with 47 per cent expecting conditions to improve.
Mr Taylor said pricing concerns would be top of mind for dairy farmers going forward, given the recent milk price wars among major supermarkets.
Mixed beef and sheep farms were the most confident, with 85 per cent of respondents in that sector expecting improved conditions.
Farmers' investment intentions also increased, with 89 per cent of respondents expecting to add to or maintain the current levels of investment in their businesses over the next year, up from 71 per cent last quarter.
The Rabobank survey has been conducted since 2000, averaging around 1,200 respondents throughout Australia each quarter.
