Rising commodity prices and improving economies offshore have boosted confidence levels among the nation's farmers, particularly in the dairy sector, says a big bank.Rabobank general manager Ben Russell said confidence had improved across all sectors.But
Rising commodity prices and improving economies offshore have boosted confidence levels among the nation's farmers, particularly in the dairy sector, says a big bank.
Rabobank general manager Ben Russell said confidence had improved across all sectors.
But he noted that though 54 percent of dairy farmers were optimistic in the bank's latest survey -- up from 41 percent the previous quarter -- the survey was taken just before the most recent fall in global dairy prices.
Fonterra said last week it is reviewing its forecast 2011 payout to 10,500 farmers following the fourth consecutive month of lower prices on its global dairy trade auctions on the internet. Prices have fallen 24 percent since a 21-month high at the April auction.
Mr Russell said that overall, 87 percent of the nation's farmers expected economic conditions to either improve or remain stable -- the fourth consecutive quarterly lift in farmer confidence.
Taken across New Zealand last month, the survey found 41 percent of farmers expected the agricultural economy to improve over the next 12 months, climbing from 34 percent in the previous survey. The number expecting conditions to decline had stayed the same at 11 percent.
"Last week's August global dairy trade results, which have seen prices fall another 8.3 percent, would not have been taken into account in the survey," Mr Russell noted.
Compared to the dairy farmers, the improvement in sheep and beef farmer confidence was less pronounced, with 34 percent expecting the agricultural economy to improve, up from 32 percent in the previous survey.
Farmgate prices for meat were generally holding at reasonable levels, with a mixed outlook.
"Farmgate beef prices are currently above the previous season, while lamb and venison prices are lower as strong offshore pricing for these products has been offset by unfavourable currency movements," Mr Russell said.
Of the farmers surveyed who expected conditions to worsen, 32 percent cited government intervention and policies as a reason. This compared to only 12 percent who had these concerns last survey, and was likely related to the introduction of the emissions trading scheme on July 1.
In terms of the performance of their own individual operations, 70 percent of dairy farmers expected an improvement in their own businesses (up from 51 percent), although only 26 percent of sheep and beef farmers were expecting their business performance to improve (down from 28 percent).
Among horticulturists, 36 percent expected their businesses to improve (up from 20 percent last survey).
Investment intentions among farmers had strengthened, with 28 percent now expecting to increase their farm business investment, up from 25 percent previously. A further 60 percent intended to maintain investment levels.
Farmers also had an increasingly bullish outlook on land values, with 23 percent of farmers expecting land prices to go up over the next 12 months and 58 percent expecting land to hold its value.
Mr Russell said sheep and beef farmers were the least optimistic about land prices, while nearly a third of dairy farmers were expecting the price of land to rise over the coming year.
