Concerns about a deteriorating global economy and the outlook for the agricultural commodity process have put a dent in New Zealand farmer confidence, says a new bank survey.

The latest quarterly Rabobank Rural Confidence Survey shows a drop in New Zealand farmer sentiment, following two previous quarters of high confidence.

The survey found only 35 per cent of farmers expected the agricultural economy to improve in the next 12 months, compared with 48 per cent in the previous survey.

And 10 per cent, up from 6, expected conditions to worsen.

Sheep and beef farmer confidence was sustained, but dairy farmers lower confidence was likely a reflection of the expectation that two years of record payouts were unlikely.

Horticultural operators were more pessimistic, and the affects of PSA were weighing heavily on the kiwifruit sector.