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More farmers are pessimistic than optimistic about the year ahead, Rabobank’s latest quarterly rural confidence survey shows.
In the survey Covid-19 was cited as a key concern by 38% of farmers with a pessimistic outlook on the agricultural economy, well back on 84% in mid-March when the pandemic was taking hold across the world.
In a statement, Rabobank New Zealand chief executive Todd Charteris said the fall, and then rise, in overall farmer confidence reflected positively on the industry’s response to the significant challenges faced in recent months.
"While most New Zealand farmers have been adversely impacted by Covid-19, the industry has done a fantastic job of coming together to lessen the extent of these impacts," Mr Charteris said.
A further contributor to improved confidence was reduced farmer concern over Government policy. There was also a "significant" number of verbatim responses from farmers flagging the country’s increased economic reliance on agriculture and general public appreciation of the industry as key reasons for optimism, he said.
Investment intentions were up marginally from the last quarter but remained at net negative levels overall. Sheep and beef farmers were more optimistic about the prospects of their own businesses than earlier in the year, while dairy farmers and horticulturists were more pessimistic.
Meanwhile, sheep and beef farm input prices rose at a very slow pace in the year to March. On-farm inflation was 0.4%, according to the latest Beef + Lamb New Zealand Economic Service sheep and beef on-farm inflation report.
The report identified annual changes in the prices of goods and services bought by New Zealand sheep and beef farms. B+LNZ Economic Service chief economist Andrew Burtt said large falls in interest rates held on-farm inflation at a low 0.4%.
Of the 16 input categories, prices increased for 12 and decreased for four — fertiliser, lime and seeds; fuel; electricity; and interest — though the decreases were insignificant except for interest, which fell 7.2%, Mr Burtt said.
The most significant price increases were for insurance (+5%); repairs, maintenance and vehicles (+4.2%); rates (+3.7%); and animal health (+3.7%).