Rabobank New Zealand chief executive Todd Charteris said the survey results shine a light on the psyche of farmers at a critical time for the nation.
“The food and agri sectors will be crucial in helping to rebuild the NZ economy and Rabobank continues to have a strong, positive long-term view of the sector outlook,” Charteris said.
The survey found a decrease in the number of farmers expecting agricultural economic conditions to improve in the coming year decreased from 21% to 12% and the number of farmers who expect conditions to worsen rose from 33% to 56%.
The number of farmers expecting the performance of the agricultural economy to stay the same fell to 29% from 44% in the last quarter.
Most farmers with a negative outlook cited covid-19 as a key factor.
Charteris said farmer concerns from March 3-18 when the survey was done are likely to have been largely on the impact of covid-19 on Chinese demand and the potential for similar falls in other markets.
“Understandably, this had a marked impact on farmer confidence, particularly in sheep and beef due to uncertainty over market access.”
Farmers’ expectations for their own business performance are also down, with fewer expecting an improved financial performance.
Horticulturalists remain the most positive.
“While sentiment was marginally back on last quarter there were still a greater number of growers expecting conditions to improve (24%) than those expecting conditions to deteriorate (18%).
“Sheep and beef farmers recorded the largest drop, falling to -40% from +16% previously while dairy farmers also tumbled from +4% last quarter to -26%.”
Despite farmers’ concerns Charteris is cautiously optimistic about the industry’s ability to navigate its way through the covid-19 storm.
“NZ’s rural sector entered the covid-19 crisis in relatively good shape with strong commodity prices, low interest rates and a competitive Kiwi dollar.
“While Rabobank expects the virus will have a significant impact on the global economy we think the sector is in a strong position to manage through these challenges,” he said.
