Farmers feeling positive despite cost concerns: Rabobank

4:27 pm today

On the sheep's back: their farmers expect improved performance.

Photo: Jess Burges Photography

Farmers are upbeat about the agri sector but the conflict in the Middle East has tempered confidence.

That is according to Rabobank's latest rural confidence survey, from the second quarter of this year.

Over half of farmers expected conditions to stay the same; about a third believed the broader agri-economy would improve over the next year; and 15 percent thought things would get worse - up from 8 percent in the last quarter.

Among negative farmers, "rising input costs" were the major source of concern, while '"rising commodity prices" and "increasing demand" were the main reasons given by those with a positive outlook.

Rabobank general manager for country banking Bruce Weir said the result was driven largely by the closure of the Strait of Hormuz, which had driven up prices for fuel and fertiliser.

"This has taken a bit of the wind out of farmers' sails and it's hardly surprising sentiment has come back a little bit this quarter - especially given the survey concluded prior to the positive developments we've seen in regard to the conflict over recent days," Weir said.

Sheep and beef farmers were the most positive - four in 10 expected their own farm performance to improve in the year ahead.

Horticulturalists, including struggling viticulture and arable growers, were the most pessimistic.

"Kiwifruit is doing extremely well but when you bring viticulture into those numbers, it's not surprising that has reduced somewhat given the challenges around viticulture at the moment.

"Albeit, there are a few green shoots starting to appear there as well," he said.

The survey found about a third of farmers expected to increase investment in on-farm infrastructure and new gear.

Weir said this was evident at Fieldays this month, with near-record attendance and strong retail sales.

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