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

 


Farmer confidence slips, but horticulture remains buoyant

New Zealand farmer confidence slips, but horticulture producers remain buoyant

Results at a Glance
• New Zealand farmer confidence has edged lower this quarter.
• Less than half of farmers now think conditions will improve in the next 12 months.
• Horticulture producers are more optimistic than others, driven by a recovery in the kiwifruit industry and stronger prices.
• Investment intentions are currently stable, but may be impacted by the recent rise in the Official Cash Rate.
• New survey data shows a third of New Zealand farmers struggling to attract/retain labour.

New Zealand farmer sentiment has eased from last year’s highs, though remains at robust levels, the latest Rabobank Rural Confidence Survey has shown.

Sentiment among horticulture producers is stronger than in the broader farming community likely due to a recovery in the kiwifruit industry following the PSA outbreak and stronger prices.

Completed earlier this month, the latest quarterly survey showed New Zealand farmer confidence eased this quarter with 42 per cent of the country’s farmers expecting the agricultural economy to improve in the next 12 months (compared to 56 per cent last quarter) while 13 per cent of farmers expect conditions to worsen (up from five per cent previously) and 44 per cent expect conditions to remain the same.

Rabobank New Zealand CEO Ben Russell said the results largely reflected changes in the economic cycle with interest rates expected to increase and the likelihood of some easing in commodity prices over the next 12 months.

“Confidence among New Zealand farmers has been strong over the past three quarters and while there has been some easing this quarter, there remains broad optimism and strong fundamentals in some sectors,” he said.

“The decline in confidence is likely related to an expectation among farmers that record high dairy prices have peaked, while interest rates are likely to increase, which may contribute to a flow-on effect across other sectors in the coming 12 months.”

The survey was completed in early March before the announcement by the Reserve Bank of New Zealand on March 13 of an increase in the Official Cash Rate (OCR).

“The Reserve Bank of New Zealand has forecast increases in the OCR of 2 to 2.25 per cent before the end of 2015,” Mr Russell said. “This alone will significantly tighten cash flows for those farmers carrying significant debt and may modify decisions around investment intentions.”

While confidence eased across all industries, horticulture producers were found to be the most optimistic with 58 per cent expecting the rural economy to improve in the year ahead.

“Horticulture producers are starting to see better prices overall, while kiwifruit growers in particular are in the midst of a recovery following the PSA outbreak in 2011,” Mr Russell said.

Of those farmers expecting agricultural conditions to worsen, 42 per cent cited falling commodity prices (down from 54 per cent previously) followed by concerns about the rising New Zealand dollar (22 per cent up from 14 per cent last quarter). Worries about government regulation/policy eased this quarter (from 22 per cent to five per cent).

Of the farmers expecting the rural economy to improve, 48 per cent cited rising commodity prices (down from 57 per cent) followed by confidence in overseas market conditions (stable at 34 per cent).

As confidence in the rural economy eased this quarter so too did New Zealand farmers’ expectations for the performance of their own farm business with 46 per cent expecting business performance to improve over the next 12 months (from 55 per cent) while 11 per cent expect a deterioration (from six per cent last quarter).

Interestingly, New Zealand farmers’ assessment of their own business viability improved this quarter with more farmers (75 per cent) reporting confidence in the overall viability of their farm business (up from 67 per cent).

Mr Russell said the strengthening in the viability index was a result of the improved seasonal and market conditions experienced over several previous quarters.

“It’s a good sign that more farmers are self-reporting stronger viability in their business, which we put down to an improved cash flow position in 2014 following better seasonal conditions towards the end of 2013 and a lift in production levels,” Mr Russell said.

For the first time the survey questioned farmers on human resources and found that among New Zealand farmers surveyed 32 per cent find it difficult to attract and retain labour in their region. Dairy farmers have less trouble in this area than other sectors (25 per cent).

Conducted since 2003, the Rabobank Rural Confidence Survey is administered by independent research agency TNS, interviewing a panel of approximately 450 farmers each quarter.

Rabobank New Zealand is a part of the international Rabobank Group, the world's leading specialist in food and agribusiness banking. Rabobank has more than 110 years' experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 42 countries, servicing the needs of approximately 10 million clients worldwide through a network of more than 1600 offices and branches. Rabobank New Zealand is one of New Zealand's leading rural lenders and a significant provider of business and corporate banking and financial services to country's food and agribusiness sector. The bank has 32 branches throughout New Zealand.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Broadband Network: Spark Launches New, Competitive Ultra Fibre Plan Line-Up

Spark is giving customers an even more compelling reason to switch to its Ultra Fibre plans from today with the introduction of new competitive pricing for the majority of its plans (details below) and Fibre Landline (voice-over-fibre technology) for ... More>>

Employment: ANZ Proposes Casualisation In Whangarei Stores

ANZ workers in Whangarei could see their incomes drop by 20 to 40 percent if the bank’s proposal to reduce the number of full-time positions goes ahead says FIRST Union national organiser Tali Williams. More>>

Finance: BNZ Develops Specialist Tāmaki Māori Banking Team

BNZ develops specialist Tāmaki Māori Banking Team to support Māori as Auckland grows More>>

Pharmaceuticals: Commerce Commission To Consider Pharmaceuticals Merger

The Commerce Commission has received an application from Pfizer Inc. seeking clearance to acquire all of the shares in Hospira Inc. More>>

Real Estate: Housing Unaffordability Issues Spread

Surging house prices in Auckland and Queenstown last month pushed home ownership even further beyond the reach of first home buyers in the two districts, according to the AMP360 Home Loan Affordability Report for March. More>>

Statistics NZ: Annual Exports To China Dip Below Australia

The value of goods exports to Australia ($8.7 billion) surpassed those to China for the year ended March 2015, Statistics New Zealand said today. More>>

Science: Hookworm Discovery At Malaghan Institute

Professor Graham Le Gros has led a team which has stimulated both innate and memory responses to the parasite, discovering along the way the unexpected behaviour of one particular immune cell, in Hookworm, one of the world’s most devastating tropical ... More>>

Business: Provinces Urged To Make Full Use Of New Air Services

Provincial New Zealand has been urged to use new air services to Auckland or risk losing them either partially or completely. The stark warning was issued today by Far North mayor John Carter at a ceremony at Kaitaia airport to mark the final Air ... More>>

Mobile: 2degrees To Credit All Calls And SMS To Nepal

In the wake of the devastating earthquake in Nepal in the weekend, 2degrees will be crediting all calls and SMS messages made to mobiles and landlines in Nepal from Friday 24th April until midnight Wednesday 29th April. More>>

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news