Dry weather was cited as the main cause for the pessimistic outlook recorded in the latest quarterly rural confidence survey from Rabobank, after southern Australia recording its second-lowest autumn rainfall on record, following a hot and dry summer.

That has created uncertainty about winter crop plantings, which are tipped to be below-average.

More than a third of the nation’s farmers expect agricultural economic conditions to worsen in the coming year, up from 21 per cent recorded in March.

The proportion expecting an improvement remains relatively steady at 18 per cent, while 41 per cent believe economic conditions will be little changed.

Grain growers were particularly worried by a lack of rain, recording the biggest drop in sentiment in the survey, and expecting a below-average winter crop.

Rabobank Australia chief executive Peter Knoblanche said it was no surprise that overall confidence had taken a hit, though confidence has been high in recent years due to healthy commodity prices.

“The resilience of farm businesses in this tough season is evident, with the survey showing strong viability, and at levels higher than in previous dry periods,” Knoblanche said.

NSW farmers were particularly anxious, with more than 60 per cent of the state in drought or drought onset, and the balance largely on watch.

Knoblanche said Queensland and NSW bear the bulk of the decline in winter crop plantings, with planted hectares expected to be down by 11 and seven per cent, respectively.

Large areas of Queensland have been drought-declared since early 2013, and more than 57 per cent of the state remains in drought.

While conditions have improved in South Australia and parts of Victoria, Knoblanche said rain is critically needed to shore up crop production.

– AAP