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NZ farmer confidence jumps to record high

NZ Newswire logoNZ Newswire 27/06/2017 Tina Morrison

New Zealand farmer confidence and investment intentions jumped to record levels in the second quarter of this year, buoyed by improved commodity prices.

Rabobank said net farmer confidence rose to 54 per cent from 27 per cent in the March quarter, hitting the highest level since its survey began in 2003.

Investment intentions lifted across all agricultural sectors, with 40 per cent of farmers expecting to increase investment in the next 12 months, up from 31 per cent last quarter and also at a record high.

Farmers across all agricultural sectors were more positive about the outlook for the agricultural economy, with 71 per cent citing improved commodity prices as a key reason for increased optimism.

This was particularly the case for dairy farmers, 77 per cent of whom cited improved commodity prices, and sheep and beef producers, at 66 per cent.

"Buoyancy in the pastoral sectors is underpinned by strengthened farmgate returns across the industries," said Rabobank New Zealand general manager for country banking Hayley Moynihan.

"Sheep and beef farmgate prices continue to hold steady at strong levels for beef and higher than initially expected for lamb, and lower supply from New Zealand as well as other key export regions will underpin good returns over the coming months.''

More than half of farmers surveyed were anticipating the performance of their own farm business to improve over the next 12 months, lifting net confidence to 47 per cent, the highest reading since late 2013.

Sheep and beef farmers recorded the biggest rise in confidence in their own farm business performance.

"It's very unusual to have farmers from all of New Zealand's key agricultural sectors so confident about the outlook for their own business's performance and this bodes well not just for the rural economy but for New Zealand's economy," Ms Moynihan said.

Horticulturalists had the strongest investment intentions, with 52 per cent expecting to increase investment in the coming 12 months.

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