PGG Wrightson's trading performance has ''held up well'' over the second half of its financial year, despite challenging conditions in the farming sector.
The rural services company has lifted its full-year forecast of annual operating earnings before interest, tax, depreciation and amortisation to between $66 million and $69 million, slightly up from its previous guidance of $62 million to $68 million.
While the longer-term fundamentals of dairy demand and trade opportunities for New Zealand remained sound, there was widespread acceptance the sector was moving into a more difficult period, chief executive Mark Dewdney said.
Dairy farmer confidence had taken a hit with farm-gate milk prices ''tumbling'', together with a realisation that softening commodity prices might continue for longer than initially anticipated.
That reduced confidence in both dairy and lamb was creating more uncertainty than usual regarding spending intentions for next season, Mr Dewdney said.
Farmers reducing expenditure would potentially affect the company's financial performance.
However, it still felt there were improvements to be made across its businesses and believed it was ''well placed'' to trade through any weakness in the market.
Its full-year results would be announced in August.
Primary Industries Minister Nathan Guy, who last week spent three days at Fieldays, the biggest agricultural event of its type in the southern hemisphere, said the mood was ''positive overall'', despite the lower dairy payout.
Cutting the official cash rate to 3.25% was a ''timely boost'' for the primary sector, Mr Guy said.
