INDEPENDENT NEWS

Farmers Feeling Less Stress From Their Banks

Published: Wed 28 Jun 2017 10:43 AM
Pressure on farmers appears to be easing a little on the back of an improved farming outlook, according to Federated Farmers’ latest Banking Survey undertaken in May by Research First.
The survey shows that 8.5%of farmers reported coming under ‘undue’ pressure from their bank over the past six months, down from 9.6% in the last survey undertaken in November 2016.
10 percent of dairy farmers reported undue pressure, which is down from 12.8% in November 2016. The drop for sharemilkers is from 15.0% down to 10%.
6.9% of non-dairy farmers (mainly meat and fibre and arable farmers) reported undue pressure, down from 8.2% in November.
"The easing of pressure could be thanks to an improved farming outlook on the back of higher commodity prices since the middle of last year, most dramatically for dairy but also for meat," Andrew Hoggard, Federated Farmers’ National Vice President said.
The average mortgage interest rate for respondents was 5.2%, unchanged from November 2016, while the average overdraft interest rate was 7.3%, down from 7.7% in November.
80.7% of farmers reported being very satisfied or satisfied with their bank relationship. This remains stable, down just a little on November’s 81.4% satisfaction. Sharemilkers had the lowest level of satisfaction at 69.5%, but this was up slightly on November.
Satisfaction with bank communication also dipped slightly with 75.9% saying it was excellent or good, down from 77.2% in November. Sharemilkers continue to be the least satisfied at 61.0%, down from 63.0% in November.
66.7% of farmers ended the 2016/17 season with a detailed and up-to-date budget for that season, a similar level as the same time last year. Meanwhile, 39.3% had both a current-season budget and a detailed up-to-date budget for the upcoming 2017/18 season, again similar to the same time last year.
"Dairy farmers and farmers with mortgages are much more likely to have detailed and up-to-date budgets. This shouldn’t be a surprise given that dairy farmers have significantly higher debt levels than other farmers, making robust budgeting much more pressing," Andrew said.
The New Zealand Bankers Association welcomed the survey results and said it demonstrated the strength of current relations between farmers and their banks.
"The consistently high bank satisfaction rating among farmers reflects the fact that banks are continuing to work closely with their agri clients. It also shows the importance of effective communication between farmers and their banks, and the need to have budgets in place, especially for those managing higher debt," said Chief Executive Karen Scott-Howman.
ENDS

Next in Business, Science, and Tech

Record Dry Spells And Effects On Forests – Expert Reaction
By: Science Media Centre
Official Cash Rate Remains At 1.0 Percent
By: The Reserve Bank of New Zealand
Climate Change Throws Tree Seeding Out Of Sync – New Study
By: University of Canterbury
Novel coronavirus detected in China –Expert Reaction
By: Science Media Centre
Flooding could release toxic gas – Expert Reaction
By: Science Media Centre
More Rain For The South While Dry Continues In The North
By: MetService
Another dry week ahead, with temperatures rising
By: MetService
Auckland Set To Break Dry Spell Record
By: NIWA
Rolleston Fire
By: Fire and Emergency NZ
Farmers Fear New Water Rules Could Push Them Under
By: RNZ
The OCR Should Be Cut
By: Michael Reddell
MPS, OCR and FSR dates for 2021
By: Reserve Bank
Reserve Bank Of New Zealand Keeps Official Cash Rate At 1 Percent
By: RNZ
XE Morning Update
By: XE Morning Update
Economic Growth Slowing Under Coalition Government
By: New Zealand National Party
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media