Rural optimism takes a dive

By Phil Boeyen, ShareChat Business News Editor

Thursday 31st January 2002

Farmer optimism has dropped to a two-year low according to the latest results of a rural confidence survey.

The latest AC Nielsen/Rabobank Rural Confidence Survey, taken in late December, shows farmer optimism is at its lowest level since the survey started two years ago, while the number of farmers who say they will cut spending this year has risen.

Dairy farmers in particular are much more pessimistic than in previous surveys and a quarter of respondents say they expect to earn less this year than previously.

Rabobank managing director Bryan Inch says weeks of wet weather late last year may well have dampened expectations among respondents, but he believes product price warnings for our major primary sectors are the most likely source of the new mood.

"We still see a fairly solid core of farmers who predict no change in the key business drivers of farm economic outlook, investment, gross income and interest rates.

"But on either side of that line the mood has clearly swung, we believe this is largely in response to the recent industry forecasts about product prices in the coming season."

Just 8% of all farmers questioned now expect farming to perform better in the next 12 months, down from 21% in the November survey and 42% a year ago.

It is the lowest number recorded since the survey began January 2000.

Mr Inch says dairy farmers show the biggest reversal, with only 8% optimistic for improvement in the year ahead compared to 24% in the last survey.

The number of farmers who say they will reduce investment in the coming year is also at its highest since the survey began, with 11% planning to curb their spending compared with 8% in the previous survey and 5% two years ago.

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