This content is supplied by Rabobank
New Zealand rural confidence has taken a sharp dive, with farmers across all sectors increasingly pessimistic about prospects for the agricultural economy in the year ahead, the latest quarterly Rabobank Rural Confidence Survey has found.
Following a gradual rise over the previous three quarters, the overall net rural confidence reading plummeted to -33 per cent in the latest survey, down from -two per cent last quarter.
The survey – completed in late August and early September – found the number of the nation’s farmers expecting the rural economy to worsen in the coming 12 months had risen to 41 per cent (from 23 per cent last survey), while those expecting an improvement had fallen to eight per cent (down from 23 per cent). A total of 48 per cent were expecting similar conditions (down from 54 per cent).
Rabobank New Zealand CEO Todd Charteris said farmer confidence was now at its lowest level since the March 2016 quarter, with concern over government policy identified by farmers as the key factor for their negative view. “As has been for the case for the past four quarters, concern over government policy remains the chief reason for farmer pessimism, and is cited by 68 per cent of farmers holding a negative outlook in the latest survey,” he said.
“Government policy relating to freshwater reform and future greenhouse gas obligations presents a major challenge for farmers and, at this time, it’s clear farmers view policy direction as the major challenge to the future prosperity of the sector.
“Rabobank remains wholeheartedly committed to supporting our New Zealand food and agribusiness clients, along with their communities, through these challenges. In doing so, we recognise the importance of this sector to New Zealand’s wider economic success over the coming years.”
Mr Charteris said with government policy the major source of worry for farmers, it was important to note the latest survey period concluded just before the Government released its freshwater policy statement on September 5.
“Given the reaction to this policy statement from farmers and farmer advocacy groups over recent weeks, it’s clear the contents of this document have further eroded the brittle confidence in the sector. However, we won’t get a gauge on just how significant an impact this has had until our next survey is released in mid-December,” he said.
Mr Charteris said in addition to concern over government policy, the latest survey also highlighted a swathe of other farmer concerns.
“Other reasons cited by farmers for their pessimistic outlook included concern over the performance of Fonterra, negative public perceptions of farming and turbulence in overseas markets,” he said.
“Despite farm-gate prices for New Zealand’s key commodities remaining relatively strong, there is a wide range of concerns now weighing on farmers’ shoulders, and the cumulative effect of these has seen overall confidence slide dramatically.”
Farm Business Performance
In line with the drop in overall rural confidence, the latest survey found farmers across all sectors were also significantly less optimistic about the performance of their own farm businesses in the coming 12 months, with the number expecting their business performance to improve declining to 24 per cent (from 31 per cent in the previous survey). Those expecting their business performance to worsen rose to 20 per cent (from 10 per cent), while 55 per cent expected no change (down from 58 per cent).
Mr Charteris said the net farm business performance reading of +4 per cent this survey was well back on the +31 per cent recorded in June.
“While well back on last quarter, this is still considerably more optimistic than how farmers are feeling about the outlook of the overall agricultural economy and it does indicate that, despite feeling they are under the pump, farmers do have some confidence in their own operations,” he said.
Dairy farmers recorded the biggest decline in sentiment when it came to the outlook for their own farm businesses in the year ahead. There is now an even spread of dairy farmers expecting their farm business performance to improve and to worsen (both 21 per cent). Similarly, sheep and beef farmers were split on the prospects for their own businesses, with 20 per cent expecting an improvement and 20 per cent expecting performance to worsen.
Mr Charteris said horticulturalists continued to be the most buoyant of all sectors with 37 per cent expecting improved performance from their business in the coming year and only 9 per cent expecting performance to worsen.
Farm Investment
Farmers’ investment intentions also fell from the June quarter, but remained at net positive levels, with 23 per cent of farmers indicating they would increase investment in the next 12 months and 17 per cent anticipating investment to decrease.
“While we’ve seen significant fluctuation in overall confidence levels over recent years, investment intentions have remained relatively stable, highlighting the commitment of New Zealand farmers to continually improve their farming operations,” Mr Charteris said.
Conducted since 2003, the Rabobank Rural Confidence Survey is administered by independent research agency TNS, interviewing a panel of approximately 450 farmers each quarter.
59 Comments
Now you tell me, I just bought a new tractor.
I think it's the future thats scary, the loss of property rights, pampering to extremists in the climate change movement, regional councils making us get consent to farm, meddling in private businesses in a way which won't make any difference to water quality. We are going to give up a lot for very little.
The problem is all those marginal farms, the ones everyone talks about with hushed voices, the ones with all the debt and the source of so many problems.
. . clearly , this coalition hate livestock farming ... they're full steam ahead with " man made climate change " ... poor deluded fools ...
Trees and aquaculture appear to have been given the Taxcinda seal of approval ....
... and horticulture seems to be ignored . .. so keep your heads down chaps , may your good luck continue . ..
If any cockie does need something that barks loudly , head down to the Beehive , this government is full of dogs ...
My hypothesis is that until the major polluters of the world cut back there emissions, whether or not climate change is real is irrelevant. Hamstringing our economy for the moral high ground will only hurt the working class and small business owners, who are already suffering from the cost of living and operating. Many people in NZ don't have the luxury to worry about climate change - theyre too busy living paycheck to paycheck
Agree that we should be incentivising development of better ways to do things. But then you have to incentivise people to adopt the better ways, otherwise inertia and the type of resistance to change you embody wins. So you do need to apply penalties to the laggards to get them to change to better ways.
My issue with penalties is if too much pressure is applied, it creates disenfranchisement in that industry and has the potential to push good people out rather than attract those same individuals. The survey saying 68% of farmers that have a negative outlook is due to policy being case in point. Low confidence won't breed healthy change
Don't disagree with the view that India and China, and of course the USA, need to cut back emissions first and foremost. That needs to happen to successfully contain the changes. But I was interested in Gummy's point of view and if he fell into the generic denial camp or had some other hypothesis I hadn't heard before.
Historical records of past changes in climate before humans were significant points to the Suns output as a major if not predominant factor. Instead of quacking on about whatever effect human activity has on climate change better devote resource to adapting to change. This current collection of clowns in he Beehive will discover the farmer and Rural reaction to their ill thought out policies when the rural vote for Labour/Greens drops to single figures at the next election. When all of Auckland's beaches are swimable 365 days a year you can expect all rural rivers similarly swimable.
Not predominant, no, unfortunately:
Therefore, the solar forcing combined with the anthropogenic CO2 forcing and other minor forcings (such as decreased volcanic activity) can account for the 0.4°C warming in the early 20th century, with the solar forcing accounting for about 40% of the total warming.
Over the past century, this increase in TSI is responsible for about 15-20% of global warming (Meehl 2004). But since TSI hasn't increased in at least the past 32 years (and more like 60 years, based on reconstructions), the Sun is not directly responsible for the warming over that period.
Talked to our banker recently. They see very few farms selling in the foreseeable future as they are very wary of lending due to current flux state of environmental rules. Environmental compliance/obligations are now weighted higher up in to their lending considerations. Currently potential purchasers are expected to do very thorough due diligence on current and future environmental apects of any land purchase.
They also said the biggest affected group of their clients under new proposals will be the non dairy farmers who take on dairy grazing and do/intend to carry out a bit of arable. The interim halt to intensification will halt their ability to diversify. They said that they don't see any issues of the same magnitude for dairy - the DIN proposal excepted. Fencing off waterways for the non dairy sector is being seen as a huge cost to some farms. As 99.6% of permanent waterways are fenced on Fonterra farms it's not seen as such a big issue.
Yeah but thats only talk at this stage - so important farmers submit, given there's being no economic/financial analysis done, even if it's only on that. The proposal talks of 'farm average' in regards to the 5m, and some farmers will have up to 2035 to do it - a few elections to go before then. Going to be interesting to see where NZ First is on this. I think I heard Winnie saying he didn't support pulling perfectly good fences out and redoing them.
Spoke to some farmers after the DairyNZ meeting down south and they felt they had better explanations of the proposal at that meeting than the MfE meetings. Also that they understood better what to submit on from their own farm's situation.
Reading the National Environment Standards rather than the 105page discussion document is a good place for farmers to start.
Thats the trouble though Cas Ob. Its only talk at the moment.
How many things are only talk at the moment?
How many battles are we to fight at the moment?
It just doesnt stop.
And at the moment...AB about to start, lambing calving or furthur north docking underway. Busy busy who has time for this shit.
This government is ripping our society apart. I have two offspring in their early 30s. Both live and work rurally. They and their friends are very angry. Both want to farm. Both work very hard and have large incomes. Both pay large taxes.
They see lazy ignorant vege urbanites doing their best to rip their future away.
They say there is such hypocrisy from them.
You shouldnt be farming, but dont mention my flight records, my lithium batteries, my leather car seats, or my ecowool insulation.
You shouldnt have any guns. None. Zip. But hey keep up that possum control on your farms so I can pretend to care about the bird life in the bush.
Urban hypocrisy and ignorance of our lifestyles and contribution to their society and existence is all out there, displayed to everyone now. And it is making the rural youth vomit with disgust.
I have been surprised how vehement they have been. Arderns government are really hated. I earlier pointed out the positive such as the reduction in farmland headed to overseas interests. But now they counter with good sheep and beef farmland being bought by overseas interests and planted with govt money in radiata.
Every which way they turn another roadblock goes up. I mean to say extra taxes on their utes while lithium powered put puts that take you to the mall get a massive leg up.
These hiluxes and rangers are filthy with genuine hard earned dirt. Ms Ardern wouldnt get in one.
(I grimace at my own ;-) )
It has been layer upon layer of crazy. Perhaps when they see airtravel taxed the same, oil carbon taxed at source, grass and soil genuinely valued and treated as the carbon sink that it obviously must be ( cos how else can cows burp methane. They had to get the carbon from somewhere).
Even today Ardern was on tele telling the world how 1. We were polluting the world with our agriculture and it was about to be taxed to hell and gone. When she should be advising the world our stock are grass fed and yours are fed corn so fix your polluting farms. 2. Questioned on gun control and getting guns off the legitimate owners while leaving the crims to keep theirs she said ahh but a very small percentage of legitimate owners cause problems. Well yes of course when you let a foreign national that has been to Pakistan and back a few times buy guns you are asking for trouble. But lets not talk about that eh.
Rural New Zealand isnt dumb. And the young rural people I know are becoming viscerally angry. Its a bit disturbing
To cap it all off Belle, we now have Wellbeing this and Wellbeing that bandied around by government, treasury, councils. But I guess that's only if you're in the in club. A few weeks back I stopped to have a chat with a couple of farmers up the road when I was out on a run. Asked them how things were going in general given the kicking they seem to get in the media these days. I think they appreciated the interest. All of that aside, they seemed happy enough with their lot. The grass is always greener :) For people who are motivated to earn a living of a solid days work out on the land, just be reassured that you are in the right place. Because being stuck behind a computer screen day after day would probably break them. I should know.
" I mean to say extra taxes on their utes while lithium powered put puts that take you to the mall get a massive leg up."
Can't take you seriously when you are spouting rubbish like this.. They aren't Lithium powered, they have lithium batteries, just like your diesel ute has a lead acid battery, and an aluminium engine block, and a steel petrol tank. all of which were mined somewhere, refined and processed in other places.
You did right, Belle. There's far too little recognition of the sad fact that pressure, from the ubiquitous pile-ons that are happening, is likely to have dire effects on the mental wellbeing of farmers and their families. And this from a Gubmint that's All Aboot the Feelz....
Thank you Waymad, it has made me consider today why would a young person want to enter Agriculture as a career? This is Nzs superpower. In 2008 when the world was in serious trouble I still sold my meat. At very good prices too. However with this constant and neverending flaying of rural life children wont dream of being farmers. Then what NZ inc?
Heh, fair call, although common usage is still to call it a petrol tank, which you fill up at the petrol station.
I notice you didn't address the point, that you whinging is just that, you diesel ute is still made from shit that was mined and processed at huge environmental cost.. and then you need to pump it fill of other mined and processed fluids to keep it running. I figured the other day my current car has used about 16,000L of petrol.. about 12Tons of fuel, mined/extracted in far away places and shipped here using even more fuel..
My point was Pragmatist, some vehicles require the grunt that electric cant provide yet. We do need to feed quite a few billion people. That cant change overnight to all electric. It possibly can never change with the tech available today.
Yet Arderns government just throws it out there that the type of vehicles that farmers require should be taxed higher and electric vehicles given a free pass plus some. So Lithium and its extraction has become a bit of a lightening rod for those of us that when we travel we have to go UP HILL or have a significant load....well it makes you spit fire. Of which I am relating here just how much fire is being spit by some of the younger people who now are responsible for feeding all of us.
I think the tax was $3000 on a new vehicle. Quite a significant amount.
I understand diesel lets loose way less carbon than petrol. It just happens to excrete other dirty shit. Which isnt much of a problem when you live in the boonies. Yet our diesels are crap because of all the bullshit emissions thingymebobs they require because townies insist on driving them in town.
But I will recap. An old new diesel is very expensive to repair since the emissions thing and many dont have long lives. So you will find us rural folk have discovered a preference for newish ones. (Having been caught out with 15k repair bills.)
All this is unfortunate I know. It would be much easier if our food just miraculously appeared in the shops from god. And all the nasty dirty vehicles in the world just disappeared. If indeed our planet is to roast then bringing in some rules on population growth might be better than starving those that are already here.
The disconnect between farm and plate is the problem.
The public eat steak but don't want to kill a cow. They want latte's but berate dairy farmers. They want to eat blue cod but despise the fisherman.
Too many city folk seem to think the food they eat magically appears on a supermarket shelf between opening hours
A chance for urban and rural to connect at a public bbq, if you will be in Christchurch tomorrow (Sept 27). Pop out to the *Ag Proud NZ Mental Health BBQ from 11:00-14:00. Enjoy a free lunch while chatting amongst Urban and Rural folk about positive farming practices and mental health awareness. *Ag Proud NZ was recently formed by younger Southland farmers and are working on setting up groups nationwide. https://www.facebook.com/agproudnz/
Check out their facebook page - they have had a BBQ in Northland and are looking for people throughout the country who will help to organise one near you. Silver Fern Farms supplied the meat for the one in Dunedin, so they have some support within ag sectors for what they are doing.
The public eat steak but don't want to kill a cow. They want latte's but berate dairy farmers.
Hipster vegans are not eating cows, and these days they seem to be drinking soy, almond or coconut lattes, from what I see. Also seems to be a massive increase in the number of folk eating more vegetables and less meat of any sort.
All that's an aside. Question is where's the right balance, the middle ground when it comes to the issues?
As a counter point I'd say my kids of a similar age and position, 3 of 5 farming are actually realitively happy with the environmental direction, guns and really most of what you mentioned. Their anger is usually directed at the farm owners at the annus of the spectrum regards the environment and employment along with disappointment at the fact that with parents who failed to own a farm they really have no chance due to the high land price. Of course if the price were to crash they and many others would then gain a advantage.
My kids got into farming via Ag contracting. They took risks and made good money. They are both just starting out with their land and have had to pay a high price but it is what it is. They both work two jobs. The farms and the contracting. They would agree with your kids. The environment work has to be done. But where is the equality? Cities allowed to put shit into the sea. Airtravel a competition to see who can do the mostest and bestest.
Hi Rick, I have been just a little harsh on dairy farmers in the past for various things. Living rural you see stuff that just shouldnt be done. And I have called it out on this very forum. Thankfully there has been a lot of change. There does need to be more. Animal welfare needs to be paramount.
Putting that aside New Zealanders farm collectively more responsibly carbon wise than many other countries. Growing corn to feed cattle on feedlots should be called out. Transporting alfalfa to China to feed dairy cows is crazy. I believe if Ardern had knowledge and guts she should be preaching our grass fed cattle and sheep with rotational grazing to the world as a shining light. Instead she slings us off and insists we will be the first to pay!
She has sold us out. For what I dont know.
People will continue to eat meat. Go take a look at Pac n Sav the fridges are brimming with it. We love meat. It helps grow healthy kids. Same with dairy.
Farming should be encouraged to be kept simple. Simple is less carbon.
More taxes really means you have to be more intensive to pay the bills. More intensive more carbon.
I think the responsibility of government is coming home to roost. The realism/reality of what it takes to earn a quid as a country is sinking in. Which is why the carbon taxes on stock have been whittled down to sfa. But my kids listen to the rhetoric. The story that is being said is farmers are bad. Personally I doubt a lot of this stuff will come to pass. They are finding taxing your biggest export business out of business just doesnt work. Yet they are caught in the headlights like the toyota possums. A lot of big talk. They have discovered the reality of governing and know to follow through is disastrous financially.
What do you pick the climate debate or pay the bills and feed people.
Change is inevitable. But its difficult to make a lot of change in a hurry and stay solvent. We must stay profitable because I see tourism taking a huge whack shortly. Why fly to the ends of the earth if flying makes you persona non grata.
Well said Belle. The climate change movement is starting to have shades of the Hitler Movement in the '30s. It is very concerning to still hear of farming kids being asked to put their hands up in class at school and then the teacher asks them to stand up and goes on to say that these kids parents are responsible for destroying our environment and are not nice people etc. And this is happening to our young kids at primary schools here in NZ. Its not only primary schools.
OMG that is horrendous Cas Ob. If that happened to my grandees I would be on such a warpath that teacher wouldnt know what hit them. Of course in every workplace there is the workplace idiot. No different for schools. That should be carefully explained to the young ones affected. Never too young to learn disrespect for the odd adult :-)
Thanks Belle. Very interested to understand more of what's going on. There's a lot we don't get exposure to in the media-stirred outrage targeting seemingly each and every side.
My impression of what folk have heard in media over the last few years is that waterways have been allowed to degrade to levels variously unswimmable or unsafe for certain uses that once they were safe for. This has been suggested as due to intensification of dairy farming without bearing the cost of cleaning up pollution that comes from them - i.e. that cost is borne by wider society around (whether in the form of lost use, or clean-up). I.e. not much different to pollution from other businesses entering and reducing the quality of waterways.
I think the impression has also been had that at the same time larger business farming has been favoured (even if unintentionally) by governments and their policies over the last decades. Does what this guy says sound accurate to you? From 2017, i.e. encompassing the effects of the last decades but pre the current policies:
https://www.stuff.co.nz/business/farming/opinion/95476745/whats-gone-wr…
A graph from Dairy NZ shows that in 1986 there were 16,000 dairy herds with an average herd size of 140 cows. Today we have 11,500 herds with an average herd size of 420 cows.
In the 1970s and 1980s a young farmer could work hard and save enough money to buy 140 cows (with help from the bank).
…
After about 10 years, the sharemilker was in a position to buy a small farm.
…
Today, just to get onto the sharemilking ladder requires 200 per cent more capital than it did before. It appears the farm owner is no longer one farmer and their family, but a syndicate of investors or a corporate owner of some description. These owners have more debt than before, which means they need to retain more of the milk cheque to be viable.
The end result is a young farmer starting today will likely never be able to work their way up to farm ownership.
So people have been getting impressions through media that 1) farmers have been able to be more profitable because of not having to clean up their own pollution (externalising this onto society) , 2) family farming is falling by the way in favour of corporate farming operations, including far more foreign ownership, and 3) corporate and foreign ownership has little interest in bearing the cost of their own pollution anyway. Like the traditional Kiwi farming way of life is falling by the way…following the American move to large corporate farming.
I think folk are also worried that some areas have or are being intensified beyond what is sustainable. Including significant effects on aquifers in the areas (direct feedback from folk in I know in horticulture, on that one). And that in some cases this has or will meant subsidising irrigation schemes etc. And then they've been told that while their incomes are taxed highly farmers can minimise tax and treat various purchases as tax-deductible expenses even when it's dubious.
(Meanwhile rural communities see city folk as massive hypocrites for having historical underinvestment in sewer and stormwater. Something that's absolutely right…Looks like both urban and rural communities over time have grown in number and pollution and its effects have become far more visible).
My overall impression from discussions including on here so far is that farmers have been investing significantly in cleaning up pollution, and that effects will be gradual. And at the same time (at least in Auckland) Watercare is investing significantly via new levies etc. in cleaning up the crap here.
I admit I don't know enough of the detail of policies under discussion now to know what is true and what is media-stoked outrage or hyperbole. There are usually three sides to a story and the last one, the truth is somewhere hidden in the background and middle. I follow your posts with great interest to try to understand more of that third side, the truth.
Very good post Rick. I would agree with just about everything you have said and quoted. Industrialised farming was let loose on New Zealand. Corporates were pretty bad on the whole. Yes its difficult for young farmers to get on the ladder. Not impossible. To me nitrogen is still a big problem. Its thrown out willy nilly. The problem being the grass and crop species we now rely on need massive amounts of N or they wont grow. We have painted ourselves into a corner.
I think our rivers are pretty good in a lot of higher country locations. But if we keep intensifying what we have that wont last. And sheep and beef farmers are on their way to doing that. Cropping hillsides and putting cattle on there in winter is very questionable. But if you were to go for a walk in the King Country you would see georgeous clear little streams, with sheep and cattle dotted everywhere interspersed with lots of native bush. We are being told those streams have to be fenced. Farmed right there is no point. And most of the farms are farmed right. We need to be able to identify those that arent.
To fence off these creeks you have to replace the water. Expensive pumps, electricity pipe and troughs. Not to mention the effort to put them all in, in terrain that is very challenging.
Its up to us to farm carefully and with the environment in mind. What the oversight should be I am not sure.
But an angus cow per hectare drinking from a creek is a whole heap different to 500 cows per ha on a crop. Govt needs to remember this. And so do we.
As for irrigation. Canterbury has a right to be mad. But look at the Hawkes Bay. Where they can irrigate we can produce such great food. Everywhere you look around Napier and Hastings people are on a mission. Most of it is to do with food production. Perhaps Canterbury can retrench a bit and get rid of some cows.
But the way I see it we tamed the mighty Waikato so we could have cheap electricity. I used to kayak fish on it. The edges of the river are horrid, as the levels are up and down like a yoyo. Its a bit hard to stomach. But I do because it enables us to live good lives. Sometimes in order to get something good we have to give up something else. Life is complex. The balance is hard to get right.
Thanks, Belle! Very interesting read. I get the impression a lot of folk are worried about the King Country and intensification for many of these reasons.
Would be nice if we could have more forums where the gaps between city and country could actually be engaged across, rather than hearing a caricature of each other through media whose method increasingly is to stoke outrage to get clicks to sell advertising. Climate, fisheries, land, rivers...very much a common good that I think most New Zealanders are very concerned about but end up engaging on in far too adversarial of manners.
New Zealand needs another political party with strong and consistent beliefs and policies to support rural communities and primary sectors because they are the back of NZ economy and they are the identity of New Zealand.
New Zealand People's United Party will partner with the National party for a more profitable and more sustainable primary sector.
Average people in China vote for who would be the beauty queen, the best singer, the best artist etc.
Experts, party members, politburo members in China vote for key policies.
The system in China simply cannot leave critical decisions to the hands of average Joe.
What is going in the UK (and in NZ under this government) is called street politics.
"Average people in China vote for who would be the beauty queen, the best singer, the best artist etc."
And the CCP Parody Bot wants you to vote for the party it's incapable of even registering.
By the way party members + politburo members <> experts. Same as anywhere in the world, really.
I don't think "xingmowang" is actually from China. Otherwise they would've brought up, and defended, the electoral process around candidates to the People's National Congress. So one can vote in China, but it's almost always going to be for a CCP candidate. There are occasionally independents, but they face a huge uphill battle to get anywhere.
How many news/media outlets follow the 5 ethic principles of journalism?
1. Truth and Accuracy
Journalists cannot always guarantee ‘truth’, but getting the facts right is the cardinal principle of journalism. We should always strive for accuracy, give all the relevant facts we have and ensure that they have been checked. When we cannot corroborate information we should say so.
2. Independence
Journalists must be independent voices; we should not act, formally or informally, on behalf of special interests whether political, corporate or cultural. We should declare to our editors – or the audience – any of our political affiliations, financial arrangements or other personal information that might constitute a conflict of interest.
3. Fairness and Impartiality
Most stories have at least two sides. While there is no obligation to present every side in every piece, stories should be balanced and add context. Objectivity is not always possible, and may not always be desirable (in the face for example of brutality or inhumanity), but impartial reporting builds trust and confidence.
4. Humanity
Journalists should do no harm. What we publish or broadcast may be hurtful, but we should be aware of the impact of our words and images on the lives of others.
5. Accountability
A sure sign of professionalism and responsible journalism is the ability to hold ourselves accountable. When we commit errors we must correct them and our expressions of regret must be sincere not cynical. We listen to the concerns of our audience. We may not change what readers write or say but we will always provide remedies when we are unfair.
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