Dairy Confidence Up, But Beef Cautious

NEW ZEALAND - The latest quarterly Rabobank Rural Confidence survey in New Zealand shows farmer confidence increasing for the fourth consecutive quarter.
calendar icon 19 August 2010
clock icon 2 minute read

Rabobank General Manager New Zealand Ben Russell says optimism rose across all sectors, but particularly amongst dairy farmers. Rising commodity prices and improved overseas markets were the main drivers of confidence, although the survey was taken just prior to the most recent fall in global dairy prices.

Taken across New Zealand in July, the survey found 41 per cent of farmers expected the agricultural economy to improve over the next 12 months. The number expecting conditions to decline stayed the same, with 14 per cent of the farmers surveyed anticipating a stable economic environment.

Worries on Emissions Scheme

Of the farmers who expect conditions to decline, a third cited government intervention and policies as a reason. “This is likely to be related to concerns surrounding the introduction of the Emissions Trading Scheme on 1 July,” explains Ben Russell.

Dairy producers optimistic

The rise in confidence was particularly marked amongst dairy farmers, with 70 per cent expecting an improvement in their business. However Ben Russell sounds a note of caution on these results, which do not take account of falling dairy prices after the survey was completed.

Sheep and beef farmers cautious

The improvement in sheep and beef farmer confidence was less pronounced. Farm gate prices for New Zealand beef are currently above last season, but lamb and venison prices are down. The number of sheep and beef farmers expecting their business performance to improve was slightly lower than last quarter.

Land prices hold their value

The majority of respondents expect land prices to hold or even rise in the next 12 months. According to Ben Russell, sheep and beef farmers are the least optimistic about land prices, but nearly a third of dairy farmers expect their land to gain value in the coming year. Across the board more farmers are expecting to maintain or increase their levels of investment.

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