The level of investment required in modern dairy farming was underlined in the latest Federated Farmers banking survey, with the size of mortgages and the number of dairy farms with overdrafts both increasing.
Across dairy and non-dairy sectors, three-quarters of the 480 farmers who responded to the survey said they felt under the same pressure from their banks as six months ago.
Eight per cent said they felt under more pressure, and just under 10 per cent were feeling less.
Research First conducted its latest survey last month, results showing farmers' overall satisfaction with their banks remained strong and stable, with an average 81 per cent satisfied or very satisfied.
Federated Farmers vice-president Andrew Hoggard said it was a positive that levels of bank satisfaction among sharemilkers had improved to be close to the industry average, given that sharemilkers represented the next generation.
"Some sharemilkers had been under quite a bit of financial pressure in the recent past, but a shout-out to them for working hard to get good financial processes in place. It's great to see they have such high levels of budgeting," he said.
"As usual though, farming isn't plain sailing. With particularly dry conditions quite early on in the summer it's going to be important that if conditions get worse farmers are making pro-active decisions on the financial implications, and keeping accountants and bank managers in the loop."
New Zealand Bankers' Association chief executive Karen Scott-Howman was also pleased that overall bank satisfaction among farmers remained consistently strong.
"It shows that banks are continuing to work closely with their agri clients. That's not surprising given the high level of bank support for the agri sector," she said.
"Constructive relationships are essential in helping to deliver good results for both farmers and their banks."
Eighty per cent of November respondents had a mortgage, the average across all farms increasing slightly since May from $3.1 million to $3.2 million. Dairy farms (89.7 per cent) and sharemilkers (97 per cent) were more likely to have mortgages than non-dairy farms (71.8 per cent).
Mortgage interest rates had been stable (average 5.2 per cent), and no respondent was paying more than 10 per cent, for the first time since the survey began in May 2015.
Eighty-five per cent of farms had overdrafts, at an average limit of $192,000. Overdraft interest rates were declining slowly, and the proportion of farmers paying more than 10 per cent interest has fallen from 14.8 per cent in May 2015 to 3.7 per cent.
Mr Hoggard said it was encouraging that only a small minority farmers felt that they had come under undue pressure over the past six months, and that that proportion (currently 8 per cent) had been easing back over the past 12 months.
The survey found that around 60 per cent of farms had a detailed, up-to-date budget for the current season. The figure was particularly high for sharemilkers, at 90 per cent.
"We expect the proportion of farmers who have budgets for next season to increase as the season progresses," Mr Hoggard added.