Dairy farmers are the most optimistic group in New Zealand's agricultural sector for the coming year, according to a Federated Farmers poll.
Some 41 per cent of dairy farmers are expecting improved market conditions in 2016, ahead of 19 per cent of meat and fibre farmers, and 17 per cent of arable farmers. Overall, 29 per cent expect improved conditions, 19 per cent expect conditions to get worse and 52 per cent expect market conditions to remain the same, according to 1100 Federated Farmers members surveyed in the run-up to Christmas.
Dairy prices have tumbled this year amid rising supplies, lacklustre Chinese demand and an import ban imposed by Russia. New Zealand is the world's largest exporter of dairy products, accounting for about a third of international dairy trade.
Fonterra Co-operative Group, the country's dominant dairy processor, has offered its farmer suppliers interest-free loans to tide them through the hard times and is betting on an improvement in prices in 2016 to support its forecast payout for the current season.
"2015 will be remembered as a year of low milk prices and adverse events such as droughts and floods that have impacted farmers' bottom lines and put New Zealand's biggest sector under enormous pressure," said Federated Farmers president William Rolleston.
"It is encouraging to see relatively higher levels of optimism among dairy farmers after what they have faced in 2015."
Rolleston said El Nino weather conditions over summer were worsening a drought in the South Island and farmers in general appeared headed for "another tough year".