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Confidence among farmers has improved to a seven-year high on the back of optimism amongst sheep and beef producers, according to the latest Rabobank/Nielsen Rural Confidence Survey.
The August survey, taken before Fonterra's increased forecast payout to dairy farmers, reflected seasonal improvements for farmers and a lower currency, said Rabobank New Zealand rural general manager Ben Russell.
Half of New Zealand's farmers expected the economy to improve in the next 12 months, up from 40 per cent in June and the highest reading since October 2000.
The number of farmers expecting economic conditions to worsen fell to 19 per cent from 26 per cent.
"Importantly, optimistic beef and sheep farmers now out-number those who are pessimistic for the first time since October 2006," said Mr Russell.
Sheep farmer confidence levels increased 12 percentage points to 33 per cent, while beef farmer confidence increased 17 points to 39 per cent.
"Sheep industry confidence has been supported by the sharp decline in the New Zealand dollar, which has particularly affected export returns, and the welcome, if overdue, seasonal lift in lamb prices, which kicked in during August," he said.
After the survey was taken, Fonterra lifted its forecast payout by 47 per cent to $6.40/kg milksolids, meaning the average Fonterra farmer will pocket $700,000 this season.
Fifty-one per cent of the 740 farmers surveyed across the country expected higher incomes in the coming year, an increase from 46 per cent in the previous survey.
- NZPA
