Farmer Confidence Levels Off
Business confidence has levelled off in the New Zealand farm sector, according to latest results of the AC Nielsen/Rabobank Rural Confidence Survey.
“There’s been a distinct levelling-off in farm outlook for the coming 12 months,” says Rabobank National Manager, Rural, Bryan Inch, Wellington.
The fourth bi-monthly snapshot of this country’s primary industry shows little or no change in key indicators since farmers were last questioned in June.
And that tallies with the opinion of organisations like Federated Farmers, who have urged industry observers not to get too carried away by reports of a rural resurgence, Mr Inch says.
More than half the farmers questioned for the latest rural confidence survey (55 percent) still predict better farm economic performance in the coming year; however this is the same as in the previous survey.
The number of those planning to spend more on their properties also shows very little movement – 43 percent this time compared to 42 percent two months ago.
Dairy farmers remain most likely to spend more (50 percent), followed by beef, sheep and mixed farmers. The total number of farmers planning to spend less remains static.
Seventy-two percent expect higher gross incomes (compared with 70 percent in the July survey), while offsetting this, 94 percent expect to pay more for inputs (compared with 92 percent in the last survey).
Eighty-seven percent of dairy farmers say they will earn more money, followed by sheep (67 percent) and beef and mixed farmers (64 percent).
While higher costs are still expected by most farmers, sheep and mixed producers are least optimistic in this regard (96 percent).
Bryan Inch says this new data reinforces the need to view farm fortunes realistically, notwithstanding recent publicity about a rural boom.
“Farming is a cyclical business, with peaks and troughs, and it’s very important to remember that. Farmers need to take steps to minimise the troughs and maximise the peaks, informing themselves of the big picture and planning for the future.”
Of the five rural confidence survey sectors – dairy; sheep; beef; mixed farming and horticulture – dairy farmers retain the brightest outlook, with 71 percent anticipating better industry performance. That’s down five percent from the June survey.
Sheep farmers are next most confident (49 percent), followed by beef (46 percent), horticultural producers (44 percent) and mixed farmers (40 percent).
While there has been little variation in most areas surveyed, there has been a significant shift in interest rate outlook, with 72 percent of those questioned expecting higher rates, down from 88 percent in June.
Overall interest rate outlook has now improved three times in a row.
In March, 94 percent of farmers questioned expected rates to rise; now that figure is 72 percent.
The AC Nielsen/Rabobank Rural Confidence Indicator is the first survey of its type in New Zealand, and is assessed bi-monthly, using AC Nielsen’s 1000-strong panel of farmers throughout the country.
Next results will be released in November.
For further comment, please contact:
Bryan Inch Michael Hales
National Manager, Rural Marketing Manager Research Director
Rabobank New Zealand Ltd Rabobank New Zealand Ltd AC Nielsen
Wellington Wellington Auckland
04 462 5650 04 462 5650 09 488 3188
025 871 429 025 843 551
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