Another survey has shown rising confidence among sheep and beef farmers in the last quarter.
Rabobank’s third quarterly survey of the year showed confidence in the broader agricultural economy lifted among sheep and beef farmers compared to last quarter. Sheep and beef farmer optimism moved from negative to positive territory, jumping from -6 percent last quarter to +7 percent in the Q3 survey.
“Sheep farmers are having a good run with intense procurement competition for tight lamb supply seeing unprecedented farmgate prices this season,” says Rabobank NZ’s general manager for country banking Hayley Gourley.
“A weaker New Zealand dollar is also underpinning price support for red meat returns and we anticipate elevated prices to continue over coming months.”
Sheep and beef farmers were also found to have more confidence in their own business performance, since last quarter.
“Sheep and beef farmers climbed to a net reading of +31 percent on this measure, up from +19 percent previously. This makes sheep and beef farmers the most positive of all the sector groups in relation to their own business performance,” she says, adding the last time this was the case was in late 2014.
It seems the sector is bucking another trend identified in the survey. Overall, New Zealand farmer confidence has eased from the previous quarter and is now at net negative levels for the first time since early 2016. The fall into negative confidence has been driven by rising dairy farmer pessimism. The net confidence reading fell from +14 percent to -9 percent in this survey, notes Gourley.
The survey also found a fall in the number of farmers expecting agricultural economy conditions to improve in the coming 12 months – down to 20 percent from 26 percent last quarter – as well as those expecting conditions to worsen (23 percent from 24 percent previously), while an increased number of New Zealand farmers were expecting the performance of the agricultural economy to stay the same (54 percent from 46 percent).
Of the 23 percent of farmers now expecting the performance of the agricultural economy to worsen over the coming year, government policies (43 percent), falling commodity prices (31 percent) and overseas markets (22 percent) were the key reasons cited in the survey for holding this pessimistic view.
Conducted since 2003, the Rabobank Rural Confidence Survey is administered by independent research agency TNS, interviewing a panel of approximately 450 farmers each quarter.