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


NZ farmer confidence falls on concern about govt policy

NZ farmer confidence falls on concern about govt policy, commodity prices

By Tina Morrison

Sept. 26 (BusinessDesk) - New Zealand farmer confidence fell in the third quarter, amid rising concerns about government policies and falling commodity prices.

Rabobank said net farmer confidence fell to 38 percent from a record high 54 percent in the second quarter. Some 46 percent of farmers who expected the agricultural economy to worsen cited government policies, the highest level recorded since the information was first collected in July 2011, while 42 percent cited falling commodity prices.

The impact of farming on the environment featured in the election campaign after a string of reports this year singled out dairy intensification as one of the key factors, alongside urbanisation, putting pressure on the quality of fresh water in lakes, rivers and streams.

"Policies relating to the farming sector have featured prominently during the recently completed election campaign, and the prospect of increased government intervention within the farm-gate appears to be a contributor to the dip in farmer confidence," said Rabobank New Zealand general manager for country banking Hayley Moynihan. "Farmers will have a much clearer idea of what, if any, changes they are likely to face once coalition negotiations are completed and the make-up of the next New Zealand government is confirmed."

Still, she said while farmer concerns about government policies and lower commodity prices may have contributed to lower confidence levels, the survey results indicated farmers were largely optimistic about the agricultural economy in the year ahead.

"This is still a very strong overall result, and, excluding the record high result last quarter, we have to go back to December 2013 to find a higher net confidence reading," she said.

Farmer expectations for the performance of their own business over the next 12 months also slipped but remained strong, with net confidence declining to a net 44 percent from 47 percent in the second quarter, which was the highest reading since late 2013.

"With commodity prices for the majority of sectors continuing to improve throughout 2017, most New Zealand farmers are consistently receiving prices for their products that exceed their costs of production," Moynihan said. "As a result, most farming businesses now find themselves in a relatively strong position."

Sheep and beef farmers recorded the biggest drop in confidence about the prospects for the agricultural economy and their own farm business performance. Their confidence in the agricultural economy dropped to a net 22 percent from 53 percent last quarter, while confidence in their own business weakened to a net 28 percent from 41 percent.

"This is likely to be a reflection of record high beef prices now easing and while lamb prices have strengthened, these may not be sustained for the full season," Moynihan said.

Dairy farmer confidence in the agricultural economy dropped to a net 50 percent from 58 percent, and they remained positive about the outlook for their own businesses, with confidence edging lower to a net 57 percent from 61 percent.

Bucking the trend, horticulturalists were more optimistic about their own businesses in the latest quarter, with confidence climbing to a net 51 percent from 38 percent.

In line with the easing in headline rural confidence, farmers’ investment intentions over the next 12 months also came back this survey, after reaching record levels last quarter, with the net investment measure slipping to 22 percent from 35 percent.

The survey found 29 percent of farmers expected to increase their investment spending, while 7 percent anticipated their investment would decrease. The majority of farmers, some 63 percent, expect their level of investment in stock, plant and land to remain the same over the next 12 months.

Investment intentions dropped across all sectors, with dairy farmers registering the largest fall, dropping to a net 22 percent from 39 percent.

The Rabobank survey is administered by independent research agency TNS and involves interviews with about 450 farmers.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats NZ: Unemployment Declines As Underutilisation Rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today. ... More>>


Digitl: The Story Behind Vodafone’s FibreX Court Ruling

Vodafone’s FibreX service was in the news this week. What is the story behind the Fair Trading Act court case? More>>

Commerce Commission: Vodafone Found Guilty Of Misleading Conduct Over 'FibreX' Service

Vodafone NZ Limited has been found guilty of engaging in conduct that was liable to mislead consumers in relation to its FibreX branded broadband service. In a case brought by the Commerce Commission and heard last year, the Auckland District Court ... More>>

Westpac: Announces Strong Financial Result

Westpac New Zealand (Westpac NZ) [i] says a strong half-year financial result has been driven by better than expected economic conditions. Chief Executive David McLean said while the global COVID-19 pandemic was far from over, the financial effect on ... More>>

MYOB: SME Confidence In Economic Performance Still Cautious

New insights from the annual MYOB Business Monitor have shown the SME sector is still cautious about the potential for further economic recovery, with two-in-five (41%) expecting the New Zealand economy to decline this year. The latest research ... More>>

Tourism Industry Aotearoa: Trans-Tasman Bubble Benefits NZ

More people have entered New Zealand than have left since the opening of the trans-Tasman bubble, says Tourism Industry Aotearoa. Since the first flight from Australia to New Zealand took off from Sydney to Auckland on 19 April, the two-way Tasman travel ... More>>