Spring brings rise in farmer confidence

NZ rural confidence has staged a rally on the back of a good start to spring growing conditions reports Scoop. However, farmer sentiment remains at low levels, held back by concerns about the rising dollar and volatile commodity prices, according to the latest quarterly Rabobank Rural Confidence Survey. The survey "“ conducted across NZ last month "“ shows 22% of the country's farmers expect the rural economy to improve in the next 12 months, a marked increase from the only 12 per cent who had that expectation in the previous quarter. And while 25% of farmers still expect conditions to worsen, this was a big drop on the 49 per cent with that view in the previous survey. This latest rise in confidence follows three previous consecutive declines. Rabobank general manager Rural NZ Ben Russell said, while spring was typically a time when  NZ farmers were at their most optimistic, this year sentiment had not made it back into net positive territory, with more farmers still expecting conditions to worsen than the number expecting conditions to improve. "While there has been a good start to spring growing conditions across most of the country, this hasn't served to outweigh market factors "“ such as the high NZ dollar, volatile commodity prices and concerns about the global economy "“ which are impacting to constrain farmer sentiment," he said. Sentiment, however, remains constrained by concerns about the rising dollar and volatile commodity prices Dairy producers are back to being the most optimistic farm sector, though confidence also improved in beef and sheep farmers. Farmer investment intentions remain robust with 80% expecting to increase or maintain their farm business investment. Mr Russell said this subdued pricing was particularly evident in beef, lamb and venison prices which were usually at their seasonal peak now, but have been very flat or easing. The survey showed dairy farmers had returned to being the most positive of all the sectors, and the only group with a net positive outlook, with more dairy producers expecting economic conditions to improve than those expecting conditions to worsen. "