Those expecting an improvement in the next 12 months fell from 26% to 20% while those expecting conditions to worsen rose slightly from 23% to 24%.
Rabobank New Zealand manager Hayley Gourley said the decline was driven by dairy farmers and was not surprising given the drop in dairy commodity prices and Fonterra trimming the farmgate milk price by 25c kg MS to $6.75 kg MS.
“Dairy farmer confidence in the agricultural economy fell sharply with the net confidence reading among dairy farmers dropping from +14% last quarter to -9% in this survey,” she said.
Conversely confidence lifted among sheep and beef farmers, jumping from minus 6% in June to plus 7%.
“Sheep farmers are having a good run with intense procurement competition for tight lamb supply seeing unprecedented farmgate prices this season.
“A weaker NZ dollar is also underpinning price support for red meat returns and we anticipate elevated prices to continue over coming months.”
Concerns with Government policies led to 26% of farmers predicting the agricultural economy will worsen in the coming year.
Of those surveyed, 43% are concerned by Government policies followed by falling commodity prices, 31%, and overseas markets, 22%.
“The Government has signalled upcoming changes in relation to freshwater management, biodiversity, greenhouse gas emissions, foreign investment requirements for farmland ownership and the Dairy Industry Restructuring Act.
“And while the exact form, timing and ultimate impact of these pending changes on the agricultural sector is still unknown it’s clear these changes are weighing on the minds of some NZ farmers,” she said
While expectations for their own business performance fell from the last quarter, levels remained higher than confidence in the broader agricultural economy.
A third thought their businesses would improve, down from 39%, while 13% thought they would worsen, up from 10%.
Horticulturists are also less confident in their own business but the decline came off a high level of plus 46%, falling to plus 11%, driven by the view the run of improving returns for their produce could be coming to an end.
But 85% of growers expect their own business conditions to improve or stay the same, which Gourley said shows the sector is still in strong health.
Conversely, nearly a third of sheep and beef farmers have confidence their own business performance will improve, up from 19% in the last survey.
“This makes sheep and beef farmers the most positive of all the sector groups in relation to their own business performance and you have to go back to late 2014 for the last time this was the case,” Gourley said.
Investment intentions across the agricultural sector also eased in line with overall farmer confidence, from 25% to 19% with just 26% of those surveyed expecting to investment more in the coming year.
“Investment intentions dropped across all sectors, with horticulturists registering the largest fall, dropping to a net reading of 15% from 41% previously,”
A Bayer NZ-Country Television State of the Rural Nation Survey has revealed half of respondents believe farming is a less attractive a career because of increased stress and financial security concerns.
Despite that the survey revealed farmers had a sense of pride in the industry, with 97% viewing the industry as a key part of NZ’s identity.
Opinion was evenly spilt at 39% for and against growing genetically modified organisms in NZ but males, 62%, were more supportive than female, 5%)
Nearly 80% of rural respondents said they had less access to services and slower internet because of their location and urban dwellers, younger people and men believe their quality of life is improving because of technologicl innovation. Rural women over the age of 40 felt less so.
Those living in rural areas and people aged over 55 were less likely to feel strongly about environmental sustainability compared to those living in urban centres and those aged 18-39.
