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Rabobank rural confidence survey

Rural News
Rabobank rural confidence survey

With all commodities in pastoral agriculture performing well, it is no surprise that farmer confidence has surged.

What has also helped is good feed conditions, that has allowed those areas dry before Christmas to rebuild covers and stock condition.

There is nothing like plenty of feed to make a farmer postive and optimistic about future prospects.

Confidence has also been seen in a reawakening of the rural real estate market, with sales of dairy and stock farms now occurring  at levels that reflect the good commodity prices.

Irrigated dairy farms in the south have sold recently for in excess of $50/kg ms (including shares).

Dryland livestock properties have been moving in the $1,000-$1,400 per su range.

After a year or so being very cautious on farm lending, the banks are back.

Rising agricultural commodity prices and improving global markets have seen New Zealand’s farmers shrug off concerns about the high dollar to register a strong improvement in rural confidence. Farmer sentiment has risen for the first time in a year and is now at the highest levels since August 2008, the latest quarterly Rabobank Rural Confidence Survey has shown. Sheep and beef farmer confidence is at 10-year highs.

The latest survey, taken late last month, shows 52 per cent of NZ farmers expect the agricultural economy to improve over the next 12 months, significantly up from the 29 per cent with that view in the previous quarter.

Rabobank general manager NZ  Ben Russell said “It is clear that for farmers commodity prices and improving global economies are outweighing the expected impact of the higher New Zealand dollar at the farm gate.”The survey showed confidence to be high across all sectors, with sheep and beef farmers particularly optimistic, even past that of the dairy sector.

This survey showed farmers’ investment intentions had surged, with more than a third (34 per cent) expecting to increase their total farm investment, up from 21 per cent with that intention in the previous survey. This was the highest level of investment intention seen since August 2008, Mr Russell noted.

Questioned about land values, 86 per cent of survey respondents expected the price of their land to stay the same or increase over the coming 12 months. “From this it would appear that many are expecting that the land price cycle is at
least beyond the trough or starting to improve,” he said.

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3 Comments

Farm sales hit new all time low.

 http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10719489

So who's worried - the farmer or the real estate industry.

 "REINZ Rural Market Spokesman Peter McDonald said the March stats showed the weakest number of farm sales seen in more than 15 years.

"While there are certainly signs of confidence in the rural sector with rising payouts and a strong improvement in sheep and beef farm profitability, this is not yet being translated in property activity."

"This is frustrating for the rural real estate industry, with a number of well presented and sound properties available for sale, and good interest from buyers," said McDonald"

Why such a contrast between the two articles? Is this just spruiking of the farm sector from two parties with vested interest?

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Meh,

The farm sales data I quoted were regional and recent. There will be a lag effect before these sales flow through to real estate statistics. Whether this is a national trend time will tell, but with commentators telling us these prices could be around for a while yet, what better time to enter the market???

And those REINZ numbers are an average for the past 3 months, not just for March. To see the March-only data, see here >> http://www.interest.co.nz/charts/real-estate/farm-sales

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I think you will find the telling comment is the one about the banks - they aren't exactly excited about the prospects of lending to the rural sector, unlike their enthusiasim for housing...

I doubt the banks are back, and if they are only in a very measured way...  

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