Hort leads expansion plans: CBA

The findings come from new research by the Commonwealth Bank of Australia (CBA) exploring agribusiness trends.

The Agri Insights study conducted by Fairfax Agricultural Marketing and Research, reported trends in 14 areas of farm production and investment intentions after questioning 1400 producers, almost 60pc of whom were aged between 45 and 65.

The research explored multiple areas of managing an agribusiness, across the physical aspects (including production scale and land size), financial investment intentions and the people aspects (regarding people working in and for the farm business).

Horticulture led the way with biggest number of farmers (15pc) intending to expand their production activities in 2014-15, followed by winter grain and sugar producers (10pc).

Although new land acquisitions are generally off the shopping list, farmers are looking at an average 31 per cent increase in spending on fencing, sheds, dams and other fixed infrastructure in the year ahead.

A 15pc lift in spending on extra skills and education for themselves, farm family members and employees is also on producers' agenda, with South Australians opening up their cheque books further to expand their training budgets by more than 20pc.

SA farmers are also planning to lift their off-farm investment by 20pc, well ahead of a solid national trend of 11pc.

SA and Western Australia are leading farm technology and innovation spending intentions, up 19pc and 17pc respectively compared to 14pc nationally.

"There's an innovation culture among SA and WA farmers showing their clear intention to invest in technology and research and development to manage seasonal and price fluctuations," said CBA's regional and agribusiness general manager for both States Andrew Hagger.

They include notable revelations that almost 70pc of farmers felt their farms were "very prepared" or at least "prepared" for a two year drought".

Even in drought-weathered NSW and Queensland 68pc and 61pc of farms respectively were drought-ready, although much less optimistic about their position than Tasmania (77pc), Victoria and WA (72pc) and SA (71pc).

Interestingly, WA also had a relatively high proportion of farmers (16pc) admitting they were "unprepared or very unprepared" for drought - equal with NSW where fodder and cash reserves have been depleted, and only slightly below droughty Queensland (18pc).

CBA's agribusiness executive general manager, Geoff Wearne said the overall level of optimism and expanding investment intentions identified by the Agri Insights research was "a bit surprising" given there was "often a fair bit of negativity" voiced about farm sector conditions.

"Overall trends indicate farmers are investing on-farm to improve sustainability and drive growth," Mr Wearne said.

While rising farm costs contributed to estimates for a 41pc rise in input investment, that trend also accounted for increased production activity in most commodity sectors, particularly on Victorian and WA farms.

Nationally, only one per cent considered extra land acquisitions a focus for the coming year (with Tasmanians the most interested, at 7pc).

NSW and South Australian farmers indicated a 2pc shift towards downsizing.

About 30pc of farmers in most States were focused on investment in fixed infrastructure - including the two drought-hit States - while SA and WA farmers were taking full advantage of their bumper harvest to lift plant and equipment spending by 17pc and 14pc.

The insight report follows the latest National Australia Bank (NAB) survey of post-farmgate agribusinesses also confirming robust optimism for the sector's medium-term, despite a drop in reported business conditions and confidence early this year.

NAB's agribusiness general manager Khan Horne said the business conditions index, now at plus four, had been positive since the second half of 2013, reflecting the benefits of a weaker dollar and continuing low interest rates.