Farmer satisfaction levels with their banks are continuing on a downwards trajectory, Federated Farmers' latest banking survey has found.
The six monthly survey of more than 1100 farmers found 62 per cent were satisfied with their bank, down four points from January 2021.
Federated Farmers said that followed a downward trend over the past five years which had seen satisfaction fall from 80 per cent.
Meanwhile, Federated Farmers president Andrew Hoggard said the number of farmers who reported they'd been feeling under pressure from their banks stayed stable at 18 per cent.
"Arable farmers are feeling the most pressure, when in earlier surveys of late it has been dairy farmers," Hoggard said.
The survey showed 71 per cent were concerned about local branch closures. Of those, 42 per cent said they needed branches to carry out their business and 56 per cent were worried about the impact of closures on rural communities.
Hoggard said provincial towns were facing many pressures, including labour shortages and the loss of productive farmland to forestry conversions.
"Bank branch closures are just another hit on confidence, making doing business in rural areas that much harder, and another reason for young people to look to cities for their future when agriculture is the main way New Zealand earns its living in the world."
Other findings from the Federated Farmers survey:
• 24 per cent of farmers said their lending conditions had changed over the past six months, down three points on November. Of those with changed conditions, 14 per cent were tougher and 10 per cent easier.
• Average mortgage interest rate was 3.8 per cent, down from 3.9 per cent in November. 91 per cent are paying mortgage interest rates of less than 5 per cent.
• Average overdraft interest rate was 6.3 per cent, down from 6.4 per cent in November. 20 per cent are paying overdraft interest rates of less than 5 per cent.
• 79 per cent of farmers have a mortgage with an average value of $4.3 million and median value of $2.2 million. Arable farms had the biggest average and median mortgages, even bigger than dairy farms.
• 78 per cent of farmers have an overdraft with an average value of $193,000 and median value of $100,000. Arable farms also had the biggest average and median mortgages.