Optimism up for farmers
Horticulture is helping to drive farmers’ air of confidence, with only five per cent expecting their farm business performance to worsen in the coming year.
The first quarterly Rabobank confidence survey of the year is a turnaround from the last two, which showed consecutive sharp declines in farmer optimism.
Net farmer confidence index about the general primary sector economy rose to +15 per cent, while those expecting agricultural economic conditions to worsen had fallen to 12 per cent (from 16 per cent previously).
The five percent of farmers expecting their own farm business performance to worsen in the coming year equalled the lowest level of individual business pessimism in the history of the survey, conducted since 2003.
Rabobank New Zealand general manager for country banking Hayley Gourley said in the previous surveys farmers had been reflecting sentiment about the new Government, but their concerns weighed less now.
‘‘Of the farmers who are expecting the agricultural economy to worsen this survey, government policy and intervention was nominated as a reason by 42 per cent, compared with 80 per cent in the previous quarter,’’ she said.
By sector, horticulturalists reported net confidence rising to +34 per cent, from +16 per cent previously.
Meanwhile, dairy farmers were more pessimistic about their future (+18 per cent in the previous survey to +11 per cent, the lowest level in this sector since mid-2016).
Net confidence remained steady among sheep and beef farmers sitting at +11 per cent.
After the fear of government policy, farmers named falling commodity prices and drought as their biggest concerns.
At an individual level, farmers were more upbeat about expectations for the performance of their own businesses in the coming 12 months than for the economy generally.
Across all sectors, 41 per cent expected their business performance to improve (from 37 per cent previously) and only five per cent expected performance to worsen (down from nine per cent).
Horticulturalists were the most optimistic of all farmers about their own business performance.
They recorded a net business performance index reading of +46 per cent, which was up from +31 percent previously.
In comparison, sheep and beef farmers were at +37 per cent (up from +28 per cent) and dairy farmers hit +33 per cent (up from +30 per cent)
Farmers’ investment intentions have rebounded, with 29 per cent now expecting to invest more in stock, plant and land in the coming 12 months (up from 26 per cent) and only five per cent planning to invest less (down from eight per cent).
Horticulturalists had the strongest investment intentions of all farmers, with dairy farmers holding the weakest.
The survey is based on a sample of 450 farmers each quarter.