Greater optimism among the country's dairy, sheep and beef farmers has seen rural confidence rise to its highest level since late 2019, according to a newly released report.
However, sentiment remains at net negative levels overall, with significantly more of the country's farmers pessimistic than optimistic about the year ahead.
After falling marginally in the September 2020 quarter, Rabobank's final Rural Confidence Survey of the year – completed late last month – found net farmer confidence was up to -23 per cent, from -32 per cent recorded in the last quarter.
The survey found an increase in the number of farmers expecting agricultural economic conditions to improve in the coming 12 months (up to 16 per cent from 13 per cent last quarter) while there were fewer farmers expecting conditions to worsen (39 per cent from 45 per cent previously).
The number expecting the performance of the agricultural economy to stay the same rose to 44 per cent from 40 per cent last quarter.
Listen to Jamie Mackay interview Rabobank chief executive Todd Charteris about the Rural Confidence Survey below:
Rabobank New Zealand chief executive Todd Charteris said confidence was up among the pastoral sector with dairy, sheep and beef farmers citing improved demand and overseas markets as the key reasons for a positive outlook.
"Demand for New Zealand dairy products has held up well since the last survey in
September and GDT event results have trended upwards over recent months. As a result,
we saw Fonterra lift the mid-point of their farmgate milk price range by 40 cents to $6.80
kg/MS in October and this will have boosted spirits among dairy industry participants," he said in a statement.
Last week's additional 20 cent lift in Fonterra's payout mid-point will have further buoyed those in the sector, but this came after the survey cut-off and was not reflected in the results, Charteris said.
Results at a glance
• New Zealand farmer confidence has risen in the last survey and is now at its highest level since late 2019, however, it remains at net negative levels overall.
• Dairy, sheep and beef farmers are now more optimistic about the prospects for the broader agricultural economy while horticulturalists are more pessimistic.
• Farmers with a positive outlook cited demand and overseas markets as the key reasons for optimism, while government policy and Covid-19 remain the key concerns for farmers with a negative outlook.
• Farm business performance expectations were up overall, driven by a strong jump in dairy farmer optimism about the outlook for their own operations.
• Farmers' investment intentions were up across the board with horticulturalists continuing to hold the strongest investment plans.