The latest quarterly report, commissioned by Beef + Lamb New Zealand, showed ``a tale of two species''. Farmers with high beef numbers were more confident than those with sheep-dominant enterprises.
Not surprisingly, the strongest level of confidence was recorded in the north of the North Island, a strong beef area, and the lowest in the southern South Island, a strong sheep area, chief executive Sam McIvor said.
Uncertainty over sheep meat markets following Brexit and declining wool prices had an effect on confidence.
``Throw in a difficult late spring across the country, where young stock haven't been `doing', and drought a not-too-distant memory, and it's understandable that farmers are uneasy right now,'' Mr McIvor said in a statement.
In several regions, farmers were facing uncertainty about where environmental regulations were heading.
The attendance of 1000 farmers at B+LNZ environmental workshops in Waikato and Southland over the last month were testament to that.
There was confidence in the long-term fundamentals of the sheep and beef industry, Mr McIvor said.
ASB's latest farmshed economics report said lamb prices were ``taking baby steps'' towards improvement.
As expected, tight production was underpinning prices and it remained a similar story in Australia.
The Chinese market had continued to lead the way, although there were reports of other markets improving, too.
While the shipping window for the Chinese New Year had passed, it appeared prices were likely to remain firm.
AgriHQ also reported better demand from the US and, surprisingly, from the UK. Recent oil-price lifts might also generate better demand from the Middle East over time.
However, the weak pound and euro continued to constrain further improvement in prices.
On balance, beef prices were expected to track sideways to start 2017. The New Zealand dollar had fallen against the USD, giving beef prices in NZD terms a little breathing space.
A low cow cull was expected in early 2017, which should support prices, and a lack of Australian supply was also likely to keep New Zealand beef prices high. Australian beef production had slowed as the Australian beef herd slowly rebuilt.