Farmer confidence stubbornly low

Monday 29th July 2024

Source: Federated Farmers

Farm confidence has fallen since the start of the year, with debt, interest rates and banks causing the greatest concern to Kiwi farmers.

Federated Farmers’ latest Farm Confidence survey of 1400 dairy, sheep, beef and arable farmers shows confidence remains stuck in historically low territory.

"It’s incredibly frustrating to see farmer confidence is still sitting at these stubbornly low levels," Federated Farmers national president Wayne Langford says.

"Unfortunately, these survey results are just reflecting how farming families are truly feeling out there at the moment.

"Farmers have really been doing it tough for some time now, with high interest rates, low commodity prices and sky-high input costs making it really hard to earn a living."

Langford says Federated Farmers were encouraged by a slight lift in farmer confidence shown in our January 2024 survey - but things have since gone backwards.

"Restoring farmer confidence is a huge focus for Federated Farmers. It’s what gets me out of bed each morning, feeling motivated to make a difference.

"We clearly have a big job ahead of us, but we’re up for the challenge. We’ll keep pushing hard to improve the lives of farming families across the country.

"The Government have done a lot of work repealing and rewriting some of the most unworkable regulations, but there’s still so much more to be done."

But the six-monthly survey clearly shows it’s not only regulation that’s eroding farmer confidence, Langford says.

"There are a whole range of other issues that are also having an impact.

"These include concerns about banking, high interest rates, soft farm-gate prices, the ability to find staff, and the general economic outlook for the country.

"Farmers will also be watching interest rates closely and desperately hoping for a rate cut later this year to help relieve some of the pressure they’re feeling."

Carried out in mid-July, the survey found more farmers consider the current economic climate to be ‘bad’ compared to January.

This is the second-worst result in the survey's history, with the lowest being July 2023.

Things are no better when looking ahead, with more than half of farmers expecting economic conditions to deteriorate in the year ahead, slightly worse than in January.

"The survey also paints a bleak picture of what’s happening with farm profitability," Langford says.

"Just over a third of farmers are making a loss right now, while only 27% say they’re making a profit and 39% breaking even.

"If that’s not bad enough, more than half of farmers expect their profitability to decline over the next 12 months."

Langford says he’s deeply concerned for farmers’ wellbeing and what this might mean for their families, rural communities and the wider New Zealand economy.

"In this July survey, about half of farmers told us their mental health and wellbeing is being affected by worries about things like interest, farmgate prices and regulation.

"We want to see farmers thriving and feeling confident, not lying in bed stressing about how to pay their bills and keep the lights on.

"When farmers lose confidence, they cut their spending and shave costs from their business, and that has major flow-on effects for the wider economy."

Farmers surveyed said their biggest concern right now is debt, interest and banks.

"This is consistently coming through as the main issue for farmers, which is why we have pushed so hard for an independent inquiry into rural banking.

"It’s great the Government have given an inquiry the green light, but farmers actually want to see action and for changes to be made to the system."

The survey also shows farmers are having serious challenges recruiting staff.

"Finding skilled staff is a major issue, particularly for dairy farmers who are in the thick of calving right now.

"It’s concerning that farmers are finding it much harder to recruit skilled and motivated staff over the past six months than the previous six months.

"It’s nearing crisis point this season, with recent changes to the Accredited Employer Work Visa scheme causing all kinds of issues."

Other concerns for farmers include reduced farmgate and commodity prices, regulation and compliance costs, and rising input costs.

Langford says Federated Farmers will continue to work with the Government to urgently address these issues and restore farmer confidence.

Federated Farmers’ Farm Confidence survey is done twice a year, in January and July, and this is the 31 st survey.

See the full results at fedfarm.org.nz/FarmConfidence

Key survey findings |

- 69% of farmers consider the current economic conditions to be ‘bad’, an 11-point deterioration. This is the second-lowest figure recorded in the survey’s history.

- One-third of all farmers are making a loss, with just over one in four farmers reporting a profit.

- Farmers say this is the hardest time to recruit skilled and motivated staff in more than a decade, with the ability to recruit now sitting at the lowest level since July 2012.

- The greatest concern for farmers right now is Debt, Interest & Banks, followed by Farmgate & Commodity Prices; Regulation & Compliance Costs; and Input Costs.

- Farmers say the three highest priority areas for the Government to address are Economy & Business Environment; Fiscal Policy; and Regulation & Compliance Costs.

ENDS

Comments from our readers

No comments yet