Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Rural Confidence Heads Down


Rural Confidence Heads Down

Lower dairy returns and the high New Zealand dollar are starting to hit farmer confidence levels, according to the latest bi-monthly AC Nielsen/ Rabobank Rural Confidence Survey

The survey – which was taken in February and March this year – found that after a period of rising confidence, most farmers are now less optimistic about their sector for the coming 12 months. Income expectations are down and investment intentions are approaching the lowest levels seen over the past three years.

Rabobank managing director Bryan Inch said the survey showed farmers in all sectors were feeling the impact of the high New Zealand dollar, while the effect of Fonterra’s lower payout was impacting on dairy farmers.

“Expectations of agricultural performance have taken a knock in all sectors, but it is most evident among beef farmers and dairy farmers” he said. “With beef farmers’ exposure to the US Dollar and a dairy payout that is back nearly a third, it isn’t really surprising”.

Nearly two-thirds of dairy farmers expect the rural economy to deteriorate in the next twelve months. This compares with 20 per cent in the last survey. Eighty per-cent of beef farmers are also expecting conditions to deteriorate, a change from 46 per-cent in February. Although there is an increased degree of pessimism, Mr Inch said the underlying factors facing farmers still remained positive.

“The world demand for dairy produce is still growing faster than supply and given the slow-down in the world economy, indications are that interest rates should stay at current levels, or perhaps drop further. We have to remember that the rural economy is hugely impacted by international events and factors such as the war in Iraq and SARS all contribute to changes in world consumption patterns”, he said. “These international factors have a significant impact on farm-gate prices in New Zealand. While these drivers are outside our control, farmers shouldn’t lose sight of them. It is the farmers’ ability to understand them, and use them in on-farm planning that will enable them to make sound strategic decisions – both short and long term.”

Farmer investment intentions are also back significantly on recent surveys. Over a quarter of farmers plan to decrease their investment in stock, plant and land over the next 12 months – the second highest level since the survey began in early 2000.

“Things are not all bad, and we need to keep things in perspective,” Mr Inch said. “Firstly we have come off a series of very good farming seasons so most farmers have invested heavily in their businesses and are able to weather a downturn. Farmers need to be mindful though that in a period of lower returns that they keep production levels up wherever possible and ensure that they have a sound production base”.

“And secondly, we are in a low interest rate environment”. Only one farmer in five is expecting rates to increase in the coming year, the lowest level seen since 2001. The survey was conducted prior to the recent announcement by the Reserve Bank to cut the Official Cash Rate by 25 basis points.

The AC Nielsen/Rabobank Rural Confidence Survey is the first survey of its type in New Zealand, and uses AC Nielsen’s 1000-strong panel of farmers across the country. The next results will be released in June 2003.

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news