New Zealand sheep and beef farmers have bucked the trend, with confidence levels rising to three year highs, according to Rabobank.
The latest Rabobank Rural Confidence Survey – a quarterly survey, completed in June – has shown a sizeable dampening in overall farmer confidence, with just 25 percent of the country’s primary producers now having a positive outlook on the performance of the agricultural economy in the next 12 months. This was down from 42 percent with that expectation in the previous survey.
Much of the softening of confidence was driven by dairy farmers, with dairy now the least confident of all the New Zealand agricultural sectors in terms of future outlook.
Sheep and beef farmer sentiment, on the other hand, recorded a healthy surge, with 57 percent of farmers in this sector reporting a positive outlook (up for 37 percent in the previous quarter). Just seven percent expected conditions to worsen in the next 12 months, down from 10 percent previously.
Rabobank New Zealand chief executive Ben Russell says the results reflecting the strengthening being seen in sheep and beef prices, on the back of lower supply due to high slaughter levels in the past 12 to 18 months.
Overall, New Zealand farmers were concerned about rising interest rates.
For those farmers with a positive outlook, the main causes for optimism were rising commodity prices (31 percent) and overseas markets/economies (nominated by 29 percent).
Russell says sheep and beef farmers had the highest expectations of their own businesses since July 2011. “It is the first time they have been ahead of dairy farmers on this measure since December 2011,” he says.
Interestingly, New Zealand farmers’ investment intentions remained unchanged since the last quarter with 93 percent of farmers intending to increase or maintain the level of investment in their business. According to Russell, while the measure was stage, the sector composition was different.
“Sheep and beef farmers have increased their investment intentions, while dairy farmers have lowered their expectations in this regard.”
In terms of implementation of best practices to improve environmentally sustainable outcomes on their farms, sheep and beef farmers were behind the average 82 percent of farmers at 74 percent in assessing they were implementing best practice in this regard.
Sixty two percent of farmers were considering succession on the family farm, but only half had a formal plan in place.
Conducted since 2003, the Rabobank Rural Confidence Survey is administered by independent research agency TNS, interviewing a panel of about 450 farmers each quarter.