You are using an older browser version. Please use a supported version for the best MSN experience.

Nothing cocky about farmer's confidence

NZN 31/03/2016 Tina Morrison

New Zealand farmer confidence fell in the first quarter, as downbeat dairy, sheep and beef farmers outweighed more optimistic horticulture growers.

Some 53 per cent of farmers were pessimistic about the outlook for the agricultural economy over the next 12 months, from 30 per cent in the previous quarter, according to Rabobank's latest rural confidence survey. Only 11 per cent were expecting conditions to improve, down from 24 per cent last quarter.

That led to a net rural confidence reading for the quarter of negative 42 per cent, compared with a negative 6 per cent last quarter and the second-lowest level recorded in the past 10 years.

The decline in sentiment in the latest survey was led by dairy farmers, with 52 per cent expecting a poorer farm business performance over the coming 12 months, compared with 28 per cent in the previous survey, while just 7 per cent expected it to improve, down from 32 per cent previously.

Some 38 per cent of dairy farmers expected to pull back on farm investment over the upcoming season.

"Given the length and severity of the current downturn that is now being experienced in the dairy sector, which has such a dominant position in New Zealand's agricultural economy, it is not surprising that rural confidence is again at this low level," Rabobank New Zealand general manager for Country Banking Hayley Moynihan said.

Falling commodity prices were cited by 83 per cent of farmers as the reason for their negative outlook on the year ahead.

Sheep and beef farmer sentiment about the outlook for their businesses also declined, with 27 per cent expecting a worsening business performance, compared with 19 per cent last quarter, due to lower lamb and sheep meat prices.

Horticulture farmers had the most positive view, with 54 per cent expecting their own business performance to improve in the year ahead and only 9 per cent expecting a deterioration. Just over half of horticulture farmers are looking to increase investment in their orchards over the coming 12 months, up from 41 per cent last quarter.

image beaconimage beaconimage beacon