In responses from 1725 farmers, a net 28.6% of them rated current economic conditions as bad, a 53-point drop on the January survey when a net 24.6% considered them to be good.
"It’s pretty grim looking forward as well," Feds president and commerce spokesman Andrew Hoggard said.
A net 58.7% of the farmers who responded expected general economic conditions to worsen over the next 12 months, a 17-point reduction on the previous survey six months ago when a net 41.5% expected them to worsen.
"Clearly, concern about the global economy is weighing on sentiment," Hoggard said.
Disruption caused by the pandemic in trade, fears of a lasting global recession, along with heightened protectionism and trade wars was thought to be a large factor in the negative expectations, Mr Hoggard said.
"This fall in expectations is echoing the fall in business and consumer confidence, and the fall in the domestic economy from Covid-19."
All the farming sector groups recorded worsening perceptions about current economic conditions, but the 70-point slump for meat and wool farmers was particularly severe considering they had been very positive in January.
Apprehension about market volatility and prices paid was reflected in the farmers’ answers about their own businesses.
A net 46.7% of respondents reported making a profit now, (a 9-point reduction on January 2020’s survey), with 57.3% making a profit, 28.9% breaking even, and 10.6% making a loss.
A net 35.5% expected their profitability to worsen over the next 12 months, down 38 points on six months ago, when a net 2.7% expected their profitability to increase.
While the latest survey showed a small rise in the number of farmers who expected their production would increase over the next 12 months, this would probably be recovery from last season’s drought-affected production.
The bad news for suppliers and towns where farmers shop was that a net 12.8% of respondents expected their spending to reduce over the next 12 months, a 30-point decrease on the January 2020 survey.
The survey report by Research First records farmers’ three greatest concerns as: the economic situation (chosen by 15.6% of respondents), regulation and compliance costs (15.3%), and farmgate and commodity prices (11.1%).
"The Government can’t do that much about the first and third of these, with global conditions being the predominant factor. But it can do something about ensuring regulation and compliance costs are sensible and affordable," Mr Hoggard said.
