Farmer confidence hit an all-time low in the latest Federated Farmers survey.
Of 1103 responses from farm businesses around New Zealand, a net of 65.2% considered current economic conditions to be bad. That’s 17.4 points worse than the survey in July last year and a record low for the survey, which has been running since 2009.
Meat and wool farmers are the most pessimistic.
A net 81.8% of farmer respondents expected economic conditions to deteriorate over the next 12 months, 0.9 points down from the survey six months ago.
“Expectations for the economy remain deeply negative, as they have been for most of the time since it slumped after mid-2017,” said Federated Farmers.
Regarding farm profitability, a net 28.4% of respondents said they turned a profit, down 26.7 points on the July 2022 survey when a net 55.1% reported they were profitable.
This reflected a “perfect storm” of falling international dairy and meat commodity prices, coupled with large increases in many farm input prices, especially fuel, fertiliser, and agri-chemicals, Federated Farmers said.
Staff shortages, both on farm and off farm, also crimped production and increased costs while higher interest rates lifted debt servicing costs.
Expectations for profitability over the next 12 months declined. A net 67.1% of respondents expected their profitability to decline over the next 12 months, 14 points worse than the July 2022 survey.
Farmers appear to expect a continuation of lower farmgate incomes and higher input costs, including interest rates. Regarding their biggest concerns, climate change and the emissions trading scheme top the chart.
Debt, interest and banks moved into second place while regulation and compliance costs were the third leading concern.
The survey was taken between January 16 and January 23.
