Farmer confidence up; still gulf: survey

New Zealand farmer confidence has continued to edge higher, but the gulf between dairy farmers and sheep and beef farmers in terms of self-assessed viability continues, the latest Rabobank rural confidence survey shows.

The final survey for the year showed confidence slightly up on the already high levels of last quarter.

The most significant gain was among horticultural producers, encouraged by an increase in prices, underpinned by strong global demand in key export markets.

Only 5% of farmers had a negative outlook for the year ahead, down 1% on the last quarter.

Commodity prices were identified as the primary driver of confidence, Rabobank New Zealand chief executive Ben Russell said.

Farmers' assessment of their own business viability eased slightly and it was most apparent among sheep and beef farmers, of whom 6% had moved from easily viable/viable to the just viable category.

''The gap in self-assessed viability between the dairy and sheep and beef sectors continues to be very large,'' Mr Russell said.

The red meat sector strategy co-ordination group has released a progress report on how the sector is tracking towards the goals of the red meat sector strategy released in 2011.

Despite difficulties over the past year, after a season of unsatisfactory prices for farmers and poor results for processors, the sector should take heart from a range of initiatives in place to improve sector performance, Meat Industry Association chairman Bill Falconer and Beef and Lamb chairman Mike Petersen, who jointly chair the group, said.

More than $300 million, including Crown funding, was committed to Primary Growth Partnership red meat programmes by meat processing companies, fertiliser companies, industry bodies, banks and others.

Also, much other investment in innovation was being made by exporters, processors and farmers, ranging from processing robotics to sheep genetics, they said.

Overall prices in this week's GlobalDairyTrade auction lifted 0.2%. Butter and casein posted gains of about 7% but prices were pulled down by a 1.5% dip in whole milk powder prices.

Last week, Fonterra unexpectedly left its forecast milk price unchanged at $8.30 and slashed its dividend by 22c because of the disparity between very high milk powder prices and prices for cheese and casein.

The auction provided the ''tiniest glimmer of hope'' for farmers,

the cheese and casein stream products all posting gains. Casein rose 7.3%, while milk powder stream products were a ''mixed bag'', ASB rural economist Nathan Penny said.

The milk powder stream's large premium over the cheese and casein stream remained and it would take a concerted run of positive auction results for the cheese and casein stream to change that dynamic, he said.


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