Thursday, July 7, 2022

Farmer confidence up sharply

New Zealand farmers are reporting a significantly improved outlook for the year ahead with a big rally recorded in the latest quarterly Rabobank Rural Confidence Survey.

The survey, completed late last month, showed 54% of the country’s farmers expect the rural economy to improve over the next year. That compared with just 28% with that expectation in the previous survey.

Just 8% of those surveyed expected conditions to worsen, down from 29% in the past quarter.

Rabobank NZ chief executive Ben Russell said a number of factors were helping to lift farmer spirits but, particularly, higher dairy commodity prices and a looming supply shortage in lamb and beef following the recent drought.

“The lower dollar has also been another cause for optimism with 27% of farmers who expected conditions to improve nominating the falling dollar as the reason,” he said.

Russell said many farmers would also be breathing a sigh of relief that the major difficulties of the past year were behind them and feeling that conditions could only improve.

“The severe drought that had been experienced in many parts of the country, particularly in the North Island, had really knocked farmer confidence, as had the consistently high currency and overall generally difficult economic conditions,” he said.

“The forecast high milk price for 2013/14 due to higher dairy commodity prices was of course a big contributor to optimism among dairy farmers.”

 

Ben Russell

Rabobank NZ

“Many are now taking cheer that the worst of these conditions are now behind them.”

Dairy farmers led the optimism in the survey with 61% expecting the rural economy to improve in the coming year.

“The forecast high milk price for 2013/14 due to higher dairy commodity prices was of course a big contributor to optimism among dairy farmers,” Russell said.

“The good autumn conditions had also enabled a swift recovery from the drought for most farms and means spring milk production is unlikely to suffer any significant negative impact.”

Sheep and beef producers and mixed farmers also had a more positive outlook. A total of 52% of sheep and beef farmers expected an improvement in the agricultural economy, up from the 24% who had that expectation in the previous survey.

Russell said the looming shortage of lamb and beef production in the country following the 2013 summer drought was fuelling optimism among beef and sheep farmers, as this is likely to be reflected in higher farmgate prices through the 2013/14 season.

“Sheep flocks around the world have contracted again and this will tighten lamb supply globally over the coming year,” he said.

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