Farmers with a positive outlook cited demand and overseas markets as the key reasons for optimism, while Government policy and Covid-19 remained the key concerns for farmers with a negative outlook.
Dairy, sheep and beef farmers were now more optimistic about the prospects for the broader agricultural economy while horticulturalists were more pessimistic.
Demand for New Zealand dairy products had held up well since the last survey in September and GDT event results had trended upwards over recent months, Rabobank New Zealand chief executive Todd Charteris said in a statement.
As a result, Fonterra lifted the midpoint of its farmgate milk price range by 40c to $6.80kg ms in October and that would have "boosted spirits" among the dairy industry.
Last week’s additional 20c lift in Fonterra’s payout midpoint would have further buoyed those in the sector, although that came after the survey cutoff and was not reflected in the results.
Sheep and beef farmer confidence also inched higher in the survey from the historically low levels recorded in September, that driven by generally solid demand for New Zealand red meat products in key markets like China and the United States, Mr Charteris said.
Government policy and Covid-19 were cited as a source of apprehension by more than half of dairy, sheep and beef farmers holding a pessimistic outlook for the year ahead.
In BNZ’s latest Rural Wrap, senior economist Doug Steel said Covid-19 vaccine hopes had brought the potential for dairy demand and prices ahead and there were already signs for that demand with the number of unsatisfied bidders in the latest GlobalDairyTrade auction reaching its highest level since April 2019.
However, there were still material risks, including Covid-19 which was still causing material disruption in many parts of the world including in the food service industries and across supply chains. There were also growing geopolitical risks as trade tensions simmered.
The bank recently nudged up its 2020-21 milk price forecast to $7.
Lamb demand appeared reasonable, albeit crimped by food service restrictions in some offshore markets. Prices had fallen but remained "generally healthy" although some high value cuts were "outright weak", Mr Steel said.
The bank saw 2020-21 season average prices for lamb about 10% below the previous season while, amid "many moving parts", it saw 2020-21 farmgate season average pricing for beef back a few percent on the previous season.
