Dip in farmer confidence: survey

There is concern over commodity prices; pictured, Perendale lambs in December. Photo by Newhaven Perendales.
There is concern over commodity prices; pictured, Perendale lambs in December. Photo by Newhaven Perendales.
An expectation of interest rates increasing and the likelihood of some easing in commodity prices over the next 12 months has seen a slip in farmer confidence.

The latest Rabobank rural confidence survey showed 42% of New Zealand's farmers expected the agricultural economy to improve in the next 12 months, down from 56% last quarter, while 13% expected conditions to worsen, up from 5%.

The decline was likely related to an expectation that record high dairy prices had peaked, while interest rates were likely to increase, which might contribute to a flow-on effect across other sectors in the coming 12 months, Rabobank New Zealand chief executive Ben Russell said.

Confidence among farmers had been strong over the past three quarters and, while there had been some easing this quarter, there remained broad optimism and ''strong fundamentals'' in some sectors, Mr Russell said.

Sentiment among horticulture producers was stronger than in the broader farming community, likely due to a recovery in the kiwifruit industry following the PSA outbreak and stronger prices.

The survey was completed before the Reserve Bank's announcement of an increase in the official cash rate to 2.75% earlier this month.

That would significantly tighten cash flows for those farmers carrying significant debt and might modify decisions around investment intentions, Mr Russell said.

Farmers' assessment of their own business viability improved in the quarter, with 75% reporting confidence in the overall viability of their farm business, up from 67% previously.

That was a result of the improved seasonal and market conditions experienced over several previous quarters, he said.

For the first time, the survey questioned farmers on human resources and found that, among those surveyed, 32% found it difficult to attract and retain labour in the region.

Dairy farmers had less trouble in that area than other sectors.

You assume too much

Dundeeboy. I am down to 5 vehicles now as I have had to sell some to make ends meet. I don't see why I should be forced to sell posessions accumulated over many years, just to get by. Only one of them has rego and WoF and none are insured.

I sold my race car to purchase a motorcycle that will allow me to at least get out of the house. As for the V8, I sold that once years ago and regretted it for 2 years until I was in a position to get it back. I won't part with it again as its my favourite to drive and even though I have little left to fuel it, it does get out every now and then for a quick blast.

Priorities

Not sure about your priorities speedfreak you can't afford meat but you can afford fuel to run a V8.  You can't afford meat but you can afford to register, warrant and I assume insure six vehicles.

I'm glad you find that amusing

I hope one day, you find yourself in a situation where you a left with less than 50 bucks a week to spend at the supermarket. Try waving your magic budget wand and see what healthy food you come up with. Don't forget to factor in food for yourself, one large dog and two 10 year olds at the weedend and cleaning products.

Perhaps, the 4 of us will be presenting at your place on Fridays for steak and veges. 

Can-of-worm subsidies not needed

Your argument doesn't make sense speedfreak. If tax goes up then you get all the negative effects of that such as tax avoidance, a slower economy, and higher tax bills/lower disposable income, all of which ultimately costs more - especially to the poor who pay more tax as a proportion of their income. That's why NZ Govt has to be backed into a corner before giving subsidies out (like at Tiwai). As for the health argument, I am on a low income myself and our family can afford to eat healthy. It comes down to education I think - some people aren't taught how to budget or cook properly. If you are earning less than me you are probably a beneficiary in which case you are subsidised anyway haha.

Subsidies are obviously needed then

At least the less well off could afford to eat better then, which would be less drain on the health system when they get unwell, which ultimately they do.

Also, putting the tax up to cover it would be great. Then those that can most afford it can pay the majority of the cost.

Look at the price of fuel in the Middle East, cheap as chips because is pumped there. Beef, lamb and dairy should be cheap as chips here for the same reason. If that means the government subsidising it, so be it.

There's obviously a good reason they do it in the US and the UK. 

Subsidies

Because the UK also subsidises their farmers and NZ produce (regardless of any superiority) can't be priced much higher or no-one will buy it. Subsidies are bad news because ultimately you are still paying full price because the money has to come from somewhere, in most cases tax!

Maybe so

But can you explain why my sister in London can purchase export quality NZ beef cheaper than we can purchase 2nd grade beef here?

Just perhaps they have it right in the US. At least their people can afford decent food.

The total of meat purchases this year for my household total two 6 packs of frankfurters and 1x 200gms pack of bacon. As far as fruit and vegetables go, you can add 1 tin of sliced pineaple.

Maybe you people lucky enough to have a job can afford better but its pretty tough for the rest of us. And it's no surprise farmers are getting stock stolen. 

Subsidised

The USA subsidises farmers which hides the true cost. Farmers here deserve a fair price given the investment and hard work that  goes into producing food and they get it without subsidies which is a good thing.

Record high dairy prices

Well aint that the truth. New Zealanders are being ripped blind for meat and veges in this country. It's cheaper to buy NZ produce overseas than here. No wonder many survive without them and live on junk food.

Just had a parcel arrive from the USA this morning and the newspaper packing had some interesting reading. Corned beef at $4 a kg and fresh cabbages at 17 cents.

No more proof needed as to why New Zealanders have a growing obesity problem. 

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