New Zealand farmer confidence and investment intentions jumped to record levels in the second quarter of this year, buoyed by improved commodity prices. Source: The New Zealand Herald
Rabobank said net farmer confidence rose to 54% from 27% in the March quarter, hitting the highest level since its survey began in 2003.
Investment intentions lifted across all agricultural sectors, with 40% of farmers expecting to increase investment in the next 12 months, up from 31% last quarter and also at a record high.
Farmers across all agricultural sectors were more positive about the outlook for the agricultural economy, with 71/5 citing improved commodity prices as a key reason for increased optimism.
This was particularly the case for dairy farmers, 77% of whom cited improved commodity prices, and sheep and beef producers, at 66%.
“Buoyancy in the pastoral sectors is underpinned by strengthened farmgate returns across the industries,” said Rabobank New Zealand general manager for country banking Hayley Moynihan.
“Sheep and beef farmgate prices continue to hold steady at strong levels for beef and higher than initially expected for lamb, and lower supply from New Zealand as well as other key export regions will underpin good returns over the coming months.
“Dairy commodity prices continue to strengthen thanks to steady demand and lower supply and this has been recently reflected in strong opening price signals for the new 2017/18 season by many dairy processors.”
More than half of farmers surveyed were anticipating the performance of their own farm business to improve over the next 12 months, lifting net confidence to 47%, the highest reading since late 2013.
Sheep and beef farmers recorded the biggest rise in confidence in their own farm business performance, jumping to a net 41 per cent from 2% last quarter, while dairy farmer confidence lifted to a net 61% from 54% and horticulturalists eased to 38% from 44%.
“It’s very unusual to have farmers from all of New Zealand’s key agricultural sectors so confident about the outlook for their own business’s performance and this bodes well not just for the rural economy but for New Zealand’s economy,” Moynihan said.