A sharp slump in confidence amongst beef and sheep farmers has tempered dairy farmer optimism in the latest Rabobank confidence survey of New Zealand farmers.
Overall net confidence fell to 25 per cent from 35 per cent in the previous quarter, although it has now been in positive levels for the past nine months.
The number of farmers expecting the rural economy to improve in the next year fell to 39 percent from 48 per cent in the previous quarter, while 42 per cent expected similar conditions.
Sheep and beef farmer expectations dropped sharply, with almost half expecting their farm businesses to worsen.
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Hayley Moynihan, Rabobank New Zealand general manager for country banking said this reflected conditions in the sector.
"Lamb prices have reached the seasonal peak, with the lucrative EU and Christmas trade now finished and returns have been around 10 percent lower than last year," she said. "While on the beef side, global prices are under pressure and the beef schedule is likely to worsen in 2017."
If the two different sectors are separated, sheep and beef farmers and dairy farmers had vastly different expectations.
Dairy farmers positive about their business rose to 67 per cent from 57 per cent last quarter, while a net 25 per cent of sheep and beef farmers were pessimistic, a turnaround from the previous quarter's positive net 2 per cent reading. Farmers in the dairy industry had the highest reading for business optimism since 2013 when the dairy boom was close to its height.
The survey sees approximately 450 farmers interviewed by an independent research agency. It has been conducted since 2003.