An expected fall in high commodity prices and a cooling in seasonal temperatures is taking rural confidence down.
Rabobank’s latest quarterly Rural Confidence Survey has shown net farmer confidence falling into negative territory for the first time since August 2009.
The survey shows more New Zealand farmers are expecting conditions to worsen, rather than improve.
The survey lists an expected end to the recent run of good weather and high commodity prices, plus a persistently high dollar, as the factors driving the decline.
It found almost a third of farmers expected the agricultural economy to worsen in the next 12 months, up from only 12% in the previous survey.
It showed the beef and sheep sectors to be the least optimistic with only 13% expecting the economy to improve over the next 12 months.
However, long-term confidence in the sector remains robust, with 92% of Farmer’s expecting to maintain or increase their level of on-farm investment over the next year.
The Rabobank Rural Confidence Survey has been running since 2003, and interviews a panel of approximately 450 farmers each quarter.