New Zealand farmers are quite concerned over commodity prices and global market issues and many of them hold a viewpoint that the agricultural economy would worsen in the next 12 months. A new survey has put forward that there has been a 4% increase to 33% in those who think agricultural economy would worsen in the next 12 months, up from 29% at the last survey.

An increased volatility is being anticipated by farmers according to the latest quarterly Rabobank Rural Confidence Survey, with the number expecting conditions to remain stable declining to 38% from 44% previously.

It should be noted though that stabilization has come in the outlook of dairy farmers after a large drop in the previous survey – even before the news of an increased Fonterra payout.

Rabobank general manager Rural New Zealand Ben Russell says that the over-riding message coming from dairy producers appears to be one of anticipated volatility, even when dairy farmer confidence remains at subdued levels on a net basis.  

Mr. Russell further added, “There is a wide difference in expectations, with an increased number of dairy farmers expecting conditions to worsen, but also an increase in the number expecting that things will improve. The number expecting conditions to stay the same, on the other hand, dropped quite significantly, from 48% to 35%.”

The latest survey has displayed a gradual improvement in the confidence of sheep and beef farmers, with 74% expecting conditions to improve or stay the same, compared to 70% last time.

The agriculture economy is expected to worsen over the 12 months by only 23%, down from 30% last time.

The optimistic outlook of sheep and beef farmers has come from the lower New Zealand dollar, and the persistence of lower supply in New Zealand and competing export regions.  

The survey has also revealed that intentions of farmers to invest remain relatively robust, with more than half of those surveyed (57%) indicating they would maintain the same level of investment in their farm enterprise, while 22% expect to increase investment.

(Via TopNews New Zealand. Contributed by Amiri Halberg)