Most farmers predict 'steady as she goes'

By Phil Boeyen, ShareChat Business News Editor

Tuesday 18th December 2001

There's been a slight dip in the number of farmers who consider their situation will improve in the year ahead, according to the latest AC Nielsen/Rabobank Rural Confidence Survey.

Figures from the November survey show that the number of farmers who expect agricultural performance to improve in the next 12 months has dropped slightly from 24% to 21%, while those who expect no change remains constant at 64%.

Despite the slight fall in confidence over half the 1,000 farmers questioned still plan to spend more on their businesses this year and predict they will earn more.

Most also expect interest rates, which are a prime driver for farm development and expansion, to stay the same or drop further in 2002.

Rabobank MD, Bryan Inch, says the latest survey shows most farmers are facing the New Year with a healthy dose of realism.

"The caution signs have been out there for some time that record export prices for most of our primary products will ease at some stage.

"Farmers are well aware of the cyclical nature of their business and have prepared for any future downturn by investing heavily into their properties over the last couple of years."

Mr Inch says the outlook for interest rates has changed significantly in the two months between surveys and now only 13% of farmers surveyed believe rates will climb, well down on 31% previously.

It is the lowest number since the bi-monthly survey began two years ago.

Of the five sectors surveyed - dairy, sheep, beef, mixed and cropping farmers - beef producers are the least optimistic, with only 9%looking towards better times ahead compared to 19% last survey. 23% of beef producers expect industry performance to drop compared to 18% last time.

Farm spending plans have remained consistent with the previous survey with 36% of farmers saying they will spend more, 58% planning to spend the same and 8% planning to cut spending.

The number of farmers who expect to earn more in the next twelve months is up or steady for most sectors and the outlook for farm input prices also remains steady, with 84% of all farmers questioned expecting to pay more in the next 12 months.

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