It is no surprise New Zealand farmer confidence has slipped given economic conditions, with profits expected to deteriorate.
The Federated Farmers farm confidence survey shows confidence in the general economy declined across all industry groups, led by arable farmers - 52% of whom expected economic conditions to worsen.
Dairy farmers and meat and fibre farmers were equally pessimistic.
Farmer sentiment has been dented by a slump in dairy prices and dry summer conditions in many parts of the country which meant stock were sent to slaughter earlier, pushing down prices.
Yesterday's GlobalDairyTrade auction results certainly did not help.
Prices fell heavily across all major products, and near-term indicators are extremely weak.
It was every bit as bad as the market braced for - and then some.
Whole milk powder prices - a key indicator for New Zealand dairy farmers - fell 13.1% from an already low level.
Some prices were not published because product was sold at the opening price.
While this is normal practice, it is rare and a sign of how weak the latest auction actually was.
The BNZ estimates aggregate dairy prices are at their lowest level since 2002.
And this is for New Zealand's largest export product, accounting for nearly a third of good exports last year and nearly a quarter of all exports.
To put it bluntly, overall dairy prices are the lowest they have been in auction history.
Fonterra is likely to reduce its 2015-16 forecast later this month from the present, now optimistic, target of $5.25 per kilogram of milksolids.
Already, economists are predicting a payout of $4.20. It may go lower.
In markets, confidence matters. Dairy markets are no different and, at present, dairy markets are at a low ebb in confidence terms.
Moreover, the current concerns around Chinese sharemarkets and, to a lesser degree, Greece, have compounded low dairy confidence.
Eventually, global supply and demand will reassert themselves on dairy prices.
As they do, prices are expected to recover much of the lost ground from the past two auctions.
That said, dairy markets remain oversupplied and prices weak.
The situation will only correct slowly, starting late this year.
In particular, New Zealand and global production needs to slow materially.
Reaction to the fall in dairy prices was swift, with the dollar falling to a fresh five-year low.
But that will help exporters of non-dairy products who have struggled to sell into their traditional markets with the kiwi at near record high levels against the Australian and United States currencies.
Figures released yesterday also indicated consumer prices rose in the second three months of the year as a weaker currency and higher global oil prices lifted the cost of petrol and housing continued to become more expensive.
There is almost nothing the Government can do to change the current dynamics of the economy.
Earlier this month it seemed almost certain the Crown accounts would return to surplus for the year ended June after posting a $1.2 billion surplus for the 11 months ended May, nearly more than $1 billion higher than the forecasts in May's Budget.
Calls for the Government to diversify the economy away from a reliance on dairy have gone basically unheeded and that may present a problem for next year.
The latest set of circumstances piles on pressure for the Reserve Bank to cut interest rates from 3.25%.
It is worth noting Canada, which faces similar economic conditions, yesterday cut its official lending rate to just 0.5% in an effort to stimulate a sluggish economy.
It appears many farmers will need to shore up their falling incomes with more debt as they slow down their spending in an effort to survive.
A cut in New Zealand's lending rate has become urgent - and essential.
