Led by dairy, farmer confidence growing in other farming sectors now

Content supplied by Federated Farmers

Federated Farmers’ New-Season Farm Confidence Survey, undertaken at the start of the 2013/14 season, has shown a major turnaround in farmer confidence.

This result is in keeping with other recent farm and business confidence surveys.

“Farmers are showing a lot more optimism in both the wider economy and individual farm prospects,” says Bruce Wills, Federated Farmers President.

“You could say farmers are in recovery mode but this bounce back comes off a low base. There is still a large gap in the sentiment of dairy farmers when compared to the other farming sectors."

“Six months ago, farmers were fairly negative about the wider economy and were very pessimistic about their own profitability. This was particularly the case for sheep and beef farmers. In contrast, dairy farmers were feeling more optimistic than they had been at this point last year [July 2012], thanks mainly to better dairy commodity prices and growing conditions."

“The 2012/13 season was definitely one of two halves. The timing of our January survey meant it did not fully pick up the impact of the late summer-autumnal drought. That drought ended up being the worst in 70-years and is now estimated to have cost the economy around $1.5 billion."

“Like all droughts it eventually broke, but as the new 2013/14 season kicks off, its residual impacts still weigh on the minds of farmers.  Federated Farmers’ New-Season Farm Confidence Survey found a number of farmers remain concerned about current weather and how its combination with the earlier drought will affect pasture and feed; any farm’s engine room."

“Last season’s drought will make the new 2013/14 season a challenging one for many farmers. I cannot hide the fact that it will be difficult for some in particular."

“Despite these concerns farmers are entering the new 2013/14 season with a lot more optimism. Dairy farmers remain the most optimistic industry group with very strong survey indicators and this isn’t really that surprising, given current payout forecasts and expectations of a recovery in production."

“We are especially pleased to see Sheep and Beef farmers feeling more optimistic. Admittedly this comes off a low base following a very tough 2012/13 season; something I can speak of with first hand experience."

“Sheep and Beef farmers are heavily focused on the problems they see with the red meat industry. This is something Federated Farmers is engaged upon as we have a singular focus to ensure viable and sustainable red-meat and fibre farming.

“When we looked at farmer concerns, the biggest one is regulation and compliance costs. When we drilled into respondent comments, this appears mainly related to regional council plans regarding water quality."

“It concerns us that a large number of respondents cited Horizon’s ‘One Plan’ and other plan changes in Southland, Otago, Canterbury, and Waikato."

“Farmgate and commodity prices and the weather were the next most pressing issues of concern."

“When you have concerns this creates priorities for government and the highest priority farmers have remains fiscal policy. For farmers, this means reducing government spending, balancing the books, and reducing government debt. Close behind is the need to reduce regulation and compliance costs.

“I can say that Federated Farmers is strongly focused on both of these issues.

“While the drought meant the second half of the 2012/13 season was tough and this 2013/14 new season survey finds encouraging improvements, the gap in sentiment between dairy and the rest of farming remains large.

“This sets a strategic work programme for Federated Farmers, especially as it relates to the red-meat and fibre.  While we are seeing some progress with wool, the red-meat sector desperately needs reform and both farmers and industry understand this need,” Mr Wills concluded.

-------------------------------------------------------------------------------------------------------------------------------------------
Farms For Sale: the most up-to-date and comprehensive listing of working farms in New Zealand, here »
-------------------------------------------------------------------------------------------------------------------------------------------

To download a copy of Federated Farmers 2013/14 New Season Farm Confidence Survey, please click here.  For previous surveys and times series data, please click here.

Headline results from the Farm Confidence Survey:

- A net 34.2 percent of respondents expect general economic conditions to improve over the next 12 months

- A net 33.7 percent of respondents expect their own farm’s profitability to improve over the next 12 months

- A net 28.3 percent of respondents expect to increase production over the next 12 months

- A net 11.0 percent of respondents expect to increase on-farm spending over the next 12 months

- A net 21.5 percent of respondents expect to their farm debt to reduce over the next 12 months

- A net 15.6 percent of respondents found it harder to find skilled and motivated staff over the past six months

- Respondents’ biggest single concern was regulation and compliance costs, cited by 19.9 percent of respondents

- Respondents’ highest priority for government is fiscal policy (i.e., reduced government spending and/or reduced government debt), cited by 14.9 percent of respondents.