Fewer NZ farmers feeling pessimistic, says Rabobank

Thursday 23rd March 2017

Net confidence edged up in the latest Rabobank confidence survey of New Zealand farmers, with growing optimism in the horticulture, beef and sheep sectors.

The first quarterly survey of the year showed that net farmer confidence rose to 27 percent versus 25 percent in the December survey.

While the survey found the number of New Zealand farmers expecting the rural economy to improve in the year ahead fell to 34 percent versus 39 percent in the prior survey, those expecting conditions to worsen fell to 7 percent from 14 percent.

Hayley Moynihan, Rabobank New Zealand general manager for country banking, said it was the lowest reading for a pessimistic outlook on the agricultural economy since December 2013.

"Not surprisingly, the proportion of farmers with a pessimistic view on the outlook for the rural economy had been significantly higher over the past three years, reflecting the tough ride we’ve had with some commodity prices over that time, most notably dairy,” she said. "There are certainly fewer farmers who are taking a pessimistic view of the coming year," she added.

The latest survey also showed the number of farmers expecting the agricultural economy to remain stable over the next 12 months had climbed to 55 percent of those surveyed, up from 42 percent previously.

Moynihan said horticulture producers and sheep and beef farmers had shown signs of increasing optimism. The overall net confidence reading in the horticulture sector climbed 39 percent from 26 percent, while among the sheep and beef sector, confidence moved out of negative territory, lifting to 9 percent from minus 5 percent.

Dairy sector confidence, on the other hand, declined – from a net reading of 52 percent in the previous survey to 41 percent.

“After rallying in the middle of last year, optimism among dairy farmers has clearly tempered in this survey,” Moynihan said. “Dairy commodity prices have softened since the previous survey – and in particular, the Global Dairy Trade Event auction where milk powder prices took a tumble was held during this survey period."

She noted, however, the latest GDT result (held this week) – where the overall price index firmed by 1.7 percent and whole milk power rose by 2.9 percent – "would be welcome news for dairy producers."

The survey sees approximately 450 farmers interviewed by an independent research agency. It has been conducted since 2003.

BusinessDesk.co.nz

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