Farmer confidence is on the up, and so it should be, especially for livestock farmers where high or record commodity prices are being recieved for most of the products they sell.
But regional and island differences are evident, as production issues due to negative climatic conditions, affect the result.
Without good feed, pastoral farmers find it very difficult to run a profitable business, and those operators that have built " drought protection" into their business will fare better.
The old hobby horses of compliance and increasing input costs,and ETS, still remain as primary concerns for many farmers.
Debt repayment has become a greater priority than it once was as farmers adjust to the new financial climate, but unfortunately some are still borrowing to survive.
Federated Farmers latest mid-season farm confidence survey, has joined other recent business confidence indicators showing greater optimism in farming over the next 12 months. Confidence though remains patchy. South Island farmers have emerged a lot more optimistic than their La Niña hit counterparts in the North Island.
“Farmers are considerably more positive about the profitability of their own farms over the next 12 months and that’s a positive,” says Don Nicolson, Federated Farmers President. “Dairy farmers remain the most optimistic of the Federation’s industry groups, yet the gap with meat and fibre as well as grains farmers has narrowed in January. That’s very positive for those industry groups.
“Farmers were hoping for a repeat of the January rain seen in 1976 and 1989 and we may just be getting it. This rain is a liquid tonic of confidence for many farmers and should greatly reduce pressure heading into February and early autumn.“It astonishes me, that completely unprompted, more than 25 percent of farmers cited rising input costs and compliance as their primary concerns. The Emissions Trading Scheme (ETS) is now, of course, considered to be a compliance cost.
“The ethic of reducing debt has continued into this survey with the proportion of farmers expecting to reduce debt increasing over the next 12 months. “Many of the 14 percent in the survey looking to increase debt were borrowing ‘survival debt’. This was to get to a position where they could again invest in their business. It’s why Federated Farmers is focused upon reducing compliance while increasing farm gate returns.
“Overall, the confidence glass for most farmers is over half full. All we need are the policies that enable farmers to maximise their potential than be hindered by them,” Mr Nicolson concluded.
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