Thursday, April 25, 2024

Farmers’ mood improves – a bit

Neal Wallace
Sentiment still in negative territory, but getting better all the time, Rabobank survey shows.
Reading Time: 2 minutes

Farmer sentiment has risen for the second consecutive quarter but still remains low, according to the latest Rabobank survey.

Completed earlier this month, the survey found farmer confidence in their sector’s performance was a net score of minus 16%, up from minus 47% previously.

It found 38% of farmers were expecting economic conditions to worsen in the next 12 months, down from 58% last quarter, with 22% expecting conditions to improve, up from 11%.

The balance, 39%, expect conditions to stay the same, up from 29% previously.

Rabobank chief executive Todd Charteris said primary producers seem more comfortable with the direction of coalition government policy (28%).

Their optimism was also boosted by rising commodity prices (20%).

Rising input prices (63%) and falling commodity prices (45%) were the major drivers for those with a negative outlook.

Farmer confidence in their own business performance rose strongly across all sector groupings, with growers the most optimistic about the year ahead and sheep and beef farmers the most pessimistic.

“Confidence is still well back on where we’d like to see it, but it is encouraging to see overall sentiment improving,” Charteris said.

Fonterra’s increase in the farmgate milk price in February has driven a sharp improvement in dairy farmer confidence, increasing between surveys from minus 20% to plus 5%.

“Expectations for their own businesses were significantly higher among sheep and beef farmers too but, with sheepmeat pricing continuing to underwhelm, the overall net reading remains low at minus 31% – minus 62% previously.”

Charteris described as a major black spot in the survey the rise from 6% to 9% in the number of farmers self-assessing their own operation as unviable.

“We did see this number lift as high as 12% in Quarter 3 last year before dropping back to 6% last quarter. And while the general uplift in confidence registered in the survey is positive, the rise back up to 9% does illustrate just how difficult the 2023-2024 season has been,” he said.

The survey found investment intentions were broadly similar to last quarter with 16% of farmers saying they would increase investment over the next 12 months and 29% expecting investment to decrease.

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