TL;DR: New Zealand farmers show cautiously growing optimism due to government changes and market potential, despite ongoing concerns over costs, commodity prices, and operational viability challenges.
Recent changes in government and the potential for higher market prices have slightly boosted farmer confidence. However, this confidence remains delicate.
The Latest Findings from Rabobank
Rabobank’s initial Rural Confidence Survey for 2024 reveals a small uptick in New Zealand farmers’ sentiment, although the general outlook is still subdued. Conducted in early March, the survey shows a decrease in farmers expecting the agri-economy to deteriorate – down to 38% from a previous 58%. Meanwhile, those anticipating improvements have doubled to 22%, and a growing number expect stability.
Sector-Specific Insights
Todd Charteris, Rabobank’s chief, notes that while overall confidence isn’t where it should be, there’s a positive trend across all sectors. Horticultural producers are particularly optimistic, with a net confidence increase to +22%, buoyed by strong seasons and high international demand. Dairy farmers also show more positivity, thanks to Fonterra’s price increase for farm gate milk, following consistent price rises in global trade events.
Sheep and beef farmers’ expectations have risen, yet low sheep prices keep their overall confidence muted. The major factors boosting optimism include favourable government policies, rising commodity prices, and robust overseas markets.
Persistent Concerns
Despite some optimism, concerns about rising input costs, falling commodity prices, and increasing interest rates dominate among the wary. International tensions, especially in the Red Sea, further add to the unease.
A worrying trend is the increase in farmers questioning their operations’ viability, now at 9% from 6% in the last quarter. This reflects the challenging nature of the 23/24 season.
The survey highlights a cautious optimism among New Zealand’s farmers, influenced by governmental policies and market dynamics. Yet, significant concerns remain, showing the complexity of achieving sustained confidence in the agricultural sector.
