TL;DR:
- The latest Federated Farmers Farm Confidence Survey indicates a slight improvement in farmer confidence from last year’s record lows, despite ongoing challenges with high-interest rates, poor commodity prices, and regulatory costs.
- Farmers express cautious optimism for the future, with expectations of increased production and spending, and a stabilisation in debt levels over the next 12 months.
- Key concerns for farmers include debt, interest rates, farmgate and commodity prices, regulation and compliance costs, and climate change policy.
Farm confidence in New Zealand has shown signs of recovery from the record lows experienced last year, according to the latest Federated Farmers Farm Confidence Survey. While still in historically low territory, there has been a positive shift in rural mood, attributed to a slight improvement since the last survey conducted in July 2023.
Federated Farmers National President Wayne Langford noted that although the improvement is modest, it represents a move from feeling less confident rather than a significant boost in confidence.
Farmers continue to face challenges with high inflation, interest rates, and lower commodity prices impacting their profitability. However, there is a growing sense of cautious optimism among farmers, with more expecting their production and spending to increase in the next 12 months, and fewer anticipating a rise in their debt levels.
Several factors are contributing to this cautious recovery in confidence. Inflation rates are showing signs of slowing, interest rates are softening, and commodity prices, particularly for dairy, have begun to stabilise.
Additionally, the change in government over the last six months, with a commitment to roll back some of the more burdensome regulations, has positively influenced farmer sentiment.
Langford expressed optimism that this could be the start of a steady increase in confidence, highlighting Federated Farmers’ efforts to work with the new government to reduce regulatory burdens on farmers. Efforts include addressing unworkable freshwater rules and cutting red tape to make compliance easier and revitalise the primary sector.
Tim Dangen, a beef farmer and the 2022 Young Farmer of the Year, echoed the sentiment of a shift in rural confidence. He noted that farmers are adjusting to changes and that the regulatory relief provided by the new government has been beneficial.
Despite the economic downturn, Dangen remains positive, viewing the current challenges as an opportunity to scrutinise and improve business efficiencies for a more robust future.
The survey identified debt, interest rates, commodity prices, regulatory costs, and climate change policy as the primary concerns for farmers. Langford highlighted the particular worry over interest rates, with many farmers taking on additional work to make ends meet.
He called for an independent inquiry into rural banking to provide transparency and address the disparity in interest charges between farmers and residential borrowers.
Langford urged farmers facing difficulties to seek support, emphasising the slight lift in confidence but acknowledging the ongoing hardships in the rural sector.
This article reflects the current state of rural confidence in New Zealand, providing insights into the challenges and optimism within the farming community as they navigate through tough economic conditions.
