Australian farm debt hit $135 billion, driven by investment in efficiency, despite rising rates and drought.

Australian farm debt has reached $135 billion, more than double the level a decade ago, driven by investments in machinery and infrastructure to cut labor and energy costs. Despite rising interest rates and drought in some areas, farm equity has grown due to soaring land values, with broadacre producers’ debt-to-equity ratio at 91%—the second highest in 25 years. Average farm capital has risen from $2.4 million to $14 million over two decades, while average debt climbed to $1.2 million. Major banks, providing 93% of rural lending, extended $6.8 billion monthly to agribusinesses through September, pushing total loans to $140.3 billion. Industry leaders credit borrowing to efficiency-driven investments, and business confidence is improving, with one in three agribusinesses expecting positive earnings.