Farmers are feeling better about the year ahead as they fetch high prices for lamb, mutton, wool and beef.
The outlook for prices of dairy products and cotton have also boosted optimism, according to the latest quarterly rural confidence survey by specialist agribusiness bank Rabobank.
However, confidence in the grains sector is subdued due to a lack of rain needed for planting winter crops in parts of Western Australia, South Australia and Queensland.
"There has rarely been a better time to be a grazier, with prices for beef, lamb and mutton continuing to hit new records, and wool prices also at an historical high - albeit back down from its recent peak," Rabobank's national manager of Country Banking Australia Todd Charteris said.
Low fodder prices were also allowing graziers to hold onto livestock for longer, which could result in meat prices staying at high levels during winter, Mr Charteris said.
Although dairy farmers were positive about the price outlook, their cash flow was expected to remain tight for the next few months.
Cotton growers were buoyed by the prospect of the price of cotton remaining above $520 per bale in 2017/18, and good availability of water.
Rabobank's survey of 1,000 farmers, which was completed in May, showed that 28 per cent were expecting conditions in the agriculture sector to improve over the next 12 months - up from 25 per cent in the prior survey.
Fifty-nine per cent expected conditions to remain stable - the same percentage as in the previous quarter.
Ten per cent of farmers are pessimistic about the year ahead.
More than three quarters of farmers expecting improved conditions said rising commodity prices were making them feel more positive.
Grain growers were the least bullish about prices and expected any boost to come from an anticipated softening in the value of the Australian dollar.
Thirty-six per cent of farmers said overall seasonal conditions were a positive driver of confidence - up from 31 per cent in the prior quarter.
The Rabobank survey for the first time asked farmers about their use of sensor technology such as drones, moisture probes, yield mapping and electronic identification.
Although only 23 per cent of all farmers used the technology, usage was much higher - at 57 per cent - among larger farming businesses with gross incomes above $1 million.
Mr Charteris said the cost of the technology was hindering its uptake.
