Farming future optimism takes a tumble

The mood of farmers has swung with confidence dropping for the first time in two years. A fall in optimism, tracked in Federated Farmers’ Mid-Season Farm Confidence Survey, was blamed on negative perceptions of the economy, farm profitability, farm production and farm spending.

Farm debt levels have also increased and fewer farms are now debt-free.

There was a 23 point drop among 1070 farmers surveyed last month for optimism about general economic conditions when compared with July last year and a 50 point drop when asked about the year ahead.

Federated Farmers vicepresident Andrew Hoggard said the drop in optimism was ‘‘quite a hit’’, but had to be viewed in context.

‘‘Pretty much all recent surveys of businesses have found a drop in confidence because of the

It was the dairy sector which suffered the biggest drops in production, farm spending and similar indicators. Meat and fibre farmers weren't so bad. Andrew Hoggard

disruption and uncertainty over October’s general election. And in mid-January, when our survey was done, farmers in many regions had endured weeks and weeks of little or no rain.’’

Optimism about future farm production fell for the first time since just over a year ago with dairy farmers the most pessimistic.

Hoggard said it was telling that farmers in all regions expected production to decrease and particularly in drought-affected Taranaki-Manawatu and OtagoSouthland.

Just over half of all farms were making a profit, which was slightly lower than six months ago, and those making a loss had stabilised at 9.3 per cent.

Optimism about future profitability had halved over the past six months and pessimistic perceptions had quadrupled. Hoggard said this also had to be put into context. At the time of the survey, dairy commodities were only just starting to lift after being on a downward trajectory for the last half of last year.

‘‘It was the dairy sector which suffered the biggest drops in production, farm spending and similar indicators. Meat and fibre farmers weren’t so bad.’’

Similar to last July’s survey, the greatest concern for farmers was regulation and compliance costs. The dry weather was also on their minds and worry about climate change policy and the potential for livestock emissions to be included in the Emissions Trading Scheme showed a marked increase.

Staff recruitment had become the most difficult in18 surveys that had been carried out since 2009.

‘‘Federated Farmers is trying to head this off with initiatives such as our new dairy apprenticeship but this trend is also a message to politicians that, as they tinker with immigration settings, the needs of rural New Zealand are very different from what’s going on in Auckland,’’ Hoggard said.

More than 20 per cent of farmers surveyed said biosecurity should be the number one priority for the government, ahead of the economy at 16 per cent. This was a reflection of farmer concerns over the spread of the cattle disease Mycoplasma bovis, Hoggard said.