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Rabobank Rural Confidence Survey Reveals Mixed Sentiments Among Farmers

New Zealand 24.06.2024
Source: The DairyNews
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The latest Rabobank Rural Confidence Survey has documented a divergence in sentiment among farmers, with growing optimism about their individual operations contrasting with increasing pessimism about the broader agricultural economy.
Rabobank Rural Confidence Survey Reveals Mixed Sentiments Among Farmers
According to the survey, confidence in the broader agricultural economy has declined, with the net confidence reading dropping to -25% from -16% in the previous quarter. In contrast, farmers’ expectations for their own business performance have shown improvement, with the net reading rising to -1% from -9%.

Todd Charteris, CEO of Rabobank, described the survey results as a "mixed bag." He expressed disappointment over the decline in general agricultural economy confidence but noted positive developments in farmers' confidence in their own business performance. "It is somewhat unusual for these two measures to move in opposite directions, which could be indicative of specific concerns about New Zealand’s overall economic outlook impacting agricultural sentiments," said Charteris.

The survey identified high input costs, lower commodity prices, and rising interest rates as the primary concerns among pessimistic farmers, with 56%, 40%, and 37% citing these issues, respectively. On the other hand, those with a more optimistic outlook pointed to rising commodity prices, favorable government policies, and increasing demand as the main reasons for their positive expectations.

Sector-specific findings showed significant variability:

Sheep and beef farmers saw a substantial improvement in confidence, with their net score rising from -31% to -17%, largely due to favorable beef pricing forecasts.
Dairy farmers reported a slight increase in confidence from 5% to 10%, buoyed by recent price increases at Global Dairy Trade auctions.
Confidence among growers increased from 23% to 26%, supported by favorable growing conditions and promising returns.
The survey also highlighted a marginal improvement in farm viability, with the percentage of farmers considering their operations as 'unviable' decreasing from 9% to 7%. Additionally, the proportion of farmers rating their businesses as 'easily viable' increased slightly from 14% to 16%.

Investment intentions among farmers also saw a slight positive shift, with fewer farmers planning to decrease investment, suggesting a cautiously optimistic outlook for future business conditions.

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