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In January farmer confidence was at the lowest level recorded in biannual surveys that Federated Farmers has been running since 2009.
Last month's survey found it had dropped even further.
More than 1200 farmers from around New Zealand responded to the July survey, Feds said.
A net 47.8 per cent of farmers considered current economic conditions to be bad, down 55.6 points from January, when a net 7.8 per cent considered conditions to be good.
"That's a huge drop in six months, Federated Farmers President and trade/economy spokesman Andrew Hoggard said.
"Obviously inflation and supply chain disruption, fallout from Covid and Russia's invasion of Ukraine are part of it, but continued concern over the pace and direction of government reform and regulation, not to mention staff shortages, are also contributing to uncertainty and gloom," he said.
A net 80.9 per cent of respondents expect general economic conditions to worsen over the next 12 months, up 16.9 points on the January survey.
"That's not inconsistent with the results from other business confidence surveys," Hoggard said.
Farmers identified their top concerns as:
• Climate change policy and the Emissions Trading Scheme
• Regulation and compliance costs
• Input costs
• Debt, interest, banks.
Raised awareness of foot and mouth disease in Indonesia and Malaysia meant biosecurity had rocketed up the list of top concerns that farmers want the Government to confront, with the others being fiscal policy; economy and business environment; regulation and compliance costs.
Despite the slide in confidence, farmers' profitability expectations haven't taken as big a hit as might have been indicated.
A net 55 per cent of respondents said they are currently making a profit - six points down on the January survey.
Looking out over the next 12 months, a net 53.1 per cent of respondents expect their profitability to decline, up 11.9 points on the January 2022 survey, when a net 41.2 per cent expected it to decline.
This is perhaps to be expected given the squeeze from higher input costs and high commodity prices retreating, Hoggard said.
Listen to Jamie Mackay interview Andrew Hoggard on The Country below:
"What's also worrying is that for the first time in our survey's history we've recorded a net negative score for production expectations.
"A net 0.5 per cent of farmers who answered our questions expect their production to decline over the next 12 months, down 2.3 points on the January result."
A net 54.6 per cent of respondents expect their spending to increase over the next 12 months, slightly up on January "but this will be due to inflation of input prices rather than spending on more goods and services," Hoggard said.
With farmers - like other New Zealanders - having to pay more interest, a net 15.3 per cent of survey respondents expect their debt to reduce over the next 12 months, down 15.6 points from the January survey when the figure was 30.9 per cent.
The Feds survey indicated a slight easing in the labour market "but it's still very tight," Hoggard said.
A net 44.3 per cent of respondents reported it has been harder to recruit skilled and motivated staff over the past six months, down 4.3 points on the January survey.