It has taken almost two years but farmers have their confidence back, mainly because of rising commodity prices and strong seasonal conditions.
The latest quarterly Rabobank survey of 1000 producers found farmers are optimistic for the first time since June 2022.
"Most farmers emerged relatively unscathed from what they anticipated to be pretty dire conditions through summer as significant rainfall was received across many farming regions," Rabobank's Marcel van Doremaele said.
Almost a third of the nation's farmers expect the agricultural economy to improve over the next year, more than double the number of the last survey.
The confidence gauge showed a significant drop in the number of producers who expect conditions will worsen - down to 16 per cent from 55 per cent.
Rising commodity prices topped the list of reasons producers gave for their positive outlook.
"Although agricultural commodity prices remain well below the highs we saw in 2022, the outlook is more positive for this year," Mr van Doremaele said.
And he said better than expected summer conditions was another key confidence driver, with 40 per cent of those surveyed expecting a brighter year ahead.
"This - along with expectation of positive farm margins for the year ahead - has driven the most significant turnaround in confidence we've seen in several years," he said.
The turnaround followed two years where rural sentiment had "languished in negative territory" corresponding to falls in the red meat markets, higher interest rates and rising input costs.
NSW delivered the largest jump in confidence thanks to good summer rainfall in many areas.
"It's good to see optimism returning," president of NSW Farmers Xavier Martin told AAP.
"However, in my travels across NSW I've noticed that the state summer rainfall has varied enormously, with farm dams significantly depleted in some areas."
Victorian farmer confidence rose to the highest level nationally, with sheep producers the most optimistic of the state's farmers this quarter.
Tasmania and Western Australia were the only two states where confidence remained at negative levels.
