Sheep and beef farmers bullish
"The most notable jump in confidence was recorded amongst sheep and beef farmers." Hayley Moynihan of Rabobank
A wave of optimism is sweeping through the rural sector, with farmers reporting to Rabobank the highest level of confidence since the bank’s surveys began in 2003.
The feel-good factor runs across all sectors, but sheep and beef farmers were the biggest movers since the last quarterly survey, climbing from of +9 per cent to +53 per cent.
Across all sectors farmer confidence has risen to +54 per cent, up from +27 per cent recorded in the March 2017 survey.
Rabobank New Zealand general manager for country banking Hayley Moynihan said this reflected buoyant prices, with beef holding steady and lamb returns higher than initially expected.
‘‘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,’’ Moynihan said.
‘‘Confidence in the agricultural economy among dairy farmers and horticulturalists was strong last quarter, and we’ve seen it climb even higher in this survey.
‘‘However, the most notable jump in confidence was recorded amongst sheep and beef farmers,’’ she said.
Federated Farmers meat and fibre chairman Miles Anderson said lamb and mutton prices had lifted optimism.
‘‘Plus, a fair proportion of farmers had drought over the past two years and it’s been a very good autumn. But there is a proviso – there’s a question whether the rise in sheep prices is procurementrelated or market-related, although we’ve been assured companies are selling what they’re killing at the moment, and it’s not going into the freezers.’’
Investment intentions rose among farmers from all sectors and are now at the highest level recorded in the survey’s history.
During the next year, 40 per cent of farmers now expect to increase investment (up from 31 per cent last quarter). These intentions were the highest levels since 2003.
Horticulturalists will invest the most, followed by dairy farmers and sheep and beef producers.
Dairy farmers recorded the biggest jump in investment intentions with 43 per cent now looking to increase investment (from 29 per cent last quarter).
The survey found that 40 per cent of farmers expected to spend more on animal feed, fertiliser or machinery in the next year in comparison to the previous year, while only eight per cent were expecting to spend less.
The number of New Zealand farmers expecting the agricultural economy to improve in the year ahead had jumped to 57 per cent (compared with 34 per cent in the previous quarter), whereas those expecting it to worsen dropped to 3 per cent of survey respondents (from 7 per cent).
More than half of farmers expected their own farm business would improve across the next 12 months contributing to a net confidence reading of +47 per cent, the highest reading since late 2013.
As with the measure relating to confidence in the agricultural economy, sheep and beef farmers recorded the biggest rise in confidence in their own farm business performance, jumping to a net reading of +41 per cent (from positive two per cent last quarter).
Dairy farmer confidence in their own business performance continued to climb, rising to a net reading of +61 per cent (from +54 per cent last quarter).