Dry weather and storm aftermath impact NZ farmer confidence

Dry weather and storm aftermath impact New Zealand farmer confidence

Extreme dry weather and devastating spring storms have hit farmers hard, causing New Zealand rural confidence to decline for the third consecutive quarter.

The latest quarterly Rabobank Rural Confidence Survey, taken earlier this month, shows net farmer confidence has decreased to 11 per cent from 24 per cent in the previous survey undertaken in October.

The number of farmers confident about the economic outlook fell with 29 per cent expecting the agricultural economy to improve over the next 12 months, compared to 37 per cent last quarter’s survey. Those expecting conditions to worsen increased to 18 per cent, from 13 per cent previously.

Rabobank general manager New Zealand Ben Russell said overall farmer confidence had declined due to the dry weather conditions and the flow-on impacts of lamb losses after the September storms.

“It is clear that the impact of a poor spring and a very early and dry start to summer is likely to be the greatest negative impact on the agricultural economy and production over the next year,” Mr Russell said.

“The extreme weather farmers have experienced in recent months has affected their confidence, particularly in the dairy sector.”

Although, optimism remains comparatively higher among dairy, and sheep and beef farmers, with 31 per cent in both sectors expecting an improvement in the economy. However this figure was down from 42 per cent and 38 per cent respectively in the previous survey.

The Rabobank survey did find however that 35 per cent of sheep and beef farmers expect their own farm business to improve in the coming 12 months with 21 per cent expecting performance to worsen.

Over the past three surveys, an increasing proportion of dairy farmers have been expecting their business performance to stay the same, while more sheep and beef farmers are expecting their business performance to improve. Mr Russell said this was likely to at least partly reflect lamb losses from the September storm would see a subsequent drop in lamb production, which would favourably impact prices over the coming season.

ENDS

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