However, covid continues to be a key source of farmer anxiety and overall confidence remains deep in negative territory.
The quarterly survey shows the nation’s net farmer confidence has risen from -44% to -26%.
It found an increase in the number of farmers expecting agricultural economic conditions to improve in the next year from 12% to 16% while fewer expect the performance of the agricultural economy to worsen, down to 42% from 56%.
The number of farmers expecting conditions to remain the same is 39%, up from 29% previously.
Rising demand and higher commodity prices are the key reasons cited by farmers now expecting the agricultural economy to improve.
Farmers’ expectations of their own farm business performance were unchanged on last quarter and negative overall.
Dairy farmers and horticulturalists are now more pessimistic about the prospects for their own businesses while sheep and beef farmers are more optimistic.
Investment intentions are up marginally from last quarter but remain negative overall.
Rabobank New Zealand chief executive officer Todd Charteris said the uplift in overall farmer confidence reflects positively on the industry’s response to the significant challenges faced in recent months.
“While most NZ 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.
“Over recent months we’ve seen the sector adjust quickly to the restrictions in place at various covid-19 alert levels and this has enabled the country’s agricultural products to be processed at close to full capacity.
“We’ve also seen exporters acting swiftly to divert products into different markets and channels when demand has waned in others.
“This strong industry response has helped to mitigate some of the negative impacts of the virus and has played a key role in lifting farmer confidence from the near-record low we saw in March.”
A reduction in farmer concern about Government policy also contributed to improved confidence, he said.
“While many farmers remain anxious about Government policy we’ve seen the percentage of farmers citing this as a reason for concern drop over recent quarters. In this survey Government policy was identified as a concern by a quarter of those with a negative outlook while back in December last year this figure reached a record high of 91%.
“The recent changes to freshwater policy announced in early June are likely to be a key contributor to this drop with these changes expected to reduce the overall costs faced by farmers.”
