Farmer confidence slumps to 10-year low
Rabobank NZ chief executive Ben Russell says payouts and other commodity prices are still below the full production cost for many farmers.
Farmer confidence is at levels last seen in 2006.
The latest quarterly Rabobank Rural Confidence Survey found confidence fell to a negative net reading of -45%, down from +13% in the March quarter.
Some 56% expect conditions to worsen, up from 23% previously.
Those expecting similar conditions to last year stand at 32%, down from 40%, with 11% expecting improvement, compared with 36% last quarter.
Rabobank NZ chief executive Ben Russell says payouts and other commodity prices are still below the full production cost for many farmers.
The summer drought, alleviated in most regions by autumn rain, was not a big factor in overall farmer responses.
The lack of confidence is reflected in investment intentions, with 60% of respondents expecting to maintain their investment, and a small proportion expecting to increase it.
Overall, 16% are expecting to increase investment, down from 28%, while 23% are looking to cut expenditure this year, up from 12%.
Mr Russell says investment appetite among dairy farmers has waned, with only 8% intending to expand over the coming 12 months.
They are de-stocking, culling cows and reducing expenditure.
Rabobank predicts a recovery in global dairy prices but it is not expected to flow through into domestic farmgate milk prices before the 2016/17 production season.
The survey is based on responses from 450 farmers.
Chris Hutching
Tue, 23 Jun 2015
Tue, 23 Jun 2015
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Farmer confidence slumps to 10-year low
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