Kiwi sheep and beef farmers concerned by Government policy and Covid-19 have pushed rural confidence further into negative territory, according to the latest Rabobank Rural Confidence Survey.
The survey, completed earlier this month, found net farmer confidence across the nation fell to -32 per cent, down from -26 per cent previously.
This latest dip in confidence followed a strong recovery last quarter, from historic lows recorded early in the year.
The number of farmers expecting the rural economy to improve in the next 12 months was down to 13 per cent (from 16 per cent last quarter), while the number expecting the rural economy to deteriorate rose to 45 per cent (up from 42 per cent).
A total of 40 per cent were expecting similar conditions (up from 39 per cent).
The chief contributor to the lower net reading was markedly-lower sheep and beef farmer sentiment, negating higher confidence levels reported among both dairy farmers and horticulturalists.
Rabobank New Zealand CEO Todd Charteris said net confidence among sheep and beef farmers dropped to -51 per cent (-18 per cent previously), driven by lingering concerns over government policy and the ongoing impacts of Covid-19.
Listen to Rowena Duncum interview Rabobank chief executive Todd Charteris on The Country below:
While sheep and beef farmers were more pessimistic, the survey found dairy farmers and horticulturalists more upbeat about the fortunes of the agricultural economy.
Dairy farmer net confidence rose to -29 per cent (-33 per cent previously), while net confidence among horticulturalists was up to -3 per cent (from -20 per cent).
Improving demand was the key reason for optimism among both dairy farmers and growers – cited by 45 per cent of dairy farmers and 92 per cent of horticulturalists who had a positive outlook on the year ahead.
Although confidence in the broader economy lifted among dairy farmers and growers, Charteris said there were still more farmers in both those sectors adopting a pessimistic
stance over an optimistic one.
"As with their sheep and beef counterparts, pessimistic dairy farmers cited government
policy and Covid-19 as the most two most pressing concerns for the ag economy, while
horticulturalists identified overseas markets as their major source of apprehension," he said in a statement.
Farm business performance
The survey found farmers' expectations for their own farm business performance in the
year ahead was marginally higher than in the last quarter.
While there were fewer farmers expecting their own farm business to perform better (13 per cent from 16 per cent previously), there was a more significant drop in those expecting farm business performance to deteriorate (37 per cent from 42 previously) and this resulted in the net reading climbing to -24 per cent from -26 percent previously.
In line with their outlook for the broader agricultural economy, expectations for farm
business were down among sheep and beef farmers, and up among dairy farmers and
"Horticulturalists recorded the most significant jump moving into net positive territory overall with 27 per cent of growers now expecting their own business to perform better in the next 12 months and only 17 per cent expecting it to worsen," Charteris said.
Farmers' investment intentions remained relatively unchanged from the previous survey.
A total of 16 per cent were expecting to increase farm investment in the coming 12 months (17 per cent previously), with 21 per cent intending to decrease investment (unchanged) and the remainder expecting to invest the same.
"Investment intentions were stable among farmers across all sector groups with
horticulturalists' investment plans remaining significantly stronger than those of farmers in the dairy and sheep and beef sectors," Charteris said.
• Conducted since 2003, the Rabobank Rural Confidence Survey is administered by
independent research agency TNS, interviewing a panel of approximately 450 farmers each quarter.