Sheep and beef farmers are increasingly positive about their own business, according to the latest Rabobank Rural Confidence Survey.
The survey, while taken in late August and early September during the period when the GlobalDairy Trade auctions had registered two price rises after 10 consecutive falls, showed dairy producers had not yet started to feel optimistic about a price recovery impacting the current season.
The survey revealed that more than half of the country’s farmers are looking to change their farm management system and the majority expect conditions in the rural economy to deteriorate rather than improve.
However, while overall confidence remained downbeat among both dairy farmers and the sector generally, beef and sheep producers expressed a more optimistic outlook for the performance of their own businesses in the 12 months ahead.
Twenty seven percent of sheep and beef farmers had an optimistic outlook for their business performance in the 12 months ahead, up from the 22 percent with that view last quarter. Just 12 percent of sheep and beef producers surveyed expected business performance to worsen, down from 25 percent previously.
Rabobank general manager country banking New Zealand Hayley Moynihan said beef and sheep farmers posted a large increase in the intended level of their investment, with 90 percent looking to either increase (19 percent) or maintain (72 percent) their on-farm investment.
“Increased confidence in this sector is largely attributable to the strong upswing in beef prices, with bull beef prices around 33 percent higher than what was reached this time last year,” she says.
Moynihan said the latest survey continued to reflect the two consecutive seasons of low dairy prices that were weighing not only on sentiment in the dairy industry, but right across the wider New Zealand economy.
“With dairy representing nearly 30 percent of the value of all New Zealand exports, the farmgate milk price is not only having a huge impact on export revenue, but on the wider economy as farmers, reduce their spending.”
Across all agricultural industries, commodity prices remained the key factor subduing sentiment this quarter with 79 percent of surveyed farmers expecting conditions in the agricultural economy to worsen on the back of prices, similar to last quarter’s reading of 78 percent.
Meanwhile seasonal conditions ere only deemed a negative factor by six percent of respondents. However, sheep and beef farmers were particularly anxious about the season, nominated by 14 percent of farmers in that sector.
“The strengthening El Nino weather pattern is being carefully monitored by drystock farmers, as they hope their feed availability is not diminished over summer,” said Moynihan.
Conducted since 2003, the Rabobank Rural Confidence Survey is administered by independent research agency TNS, interviewing a panel of about 450 farmers each quarter.