Rural confidence in decline in NZ

The country's farmers have experienced their first decline in confidence in 12 months, according to the latest Rabobank/Nielsen Rural Confidence Survey.

The survey - taken across New Zealand last month - showed the number of farmers expecting the rural economy to improve had dropped to 34 per cent, down from 49 per cent in the previous survey (taken in October). The number expecting conditions to worsen had increased to 22 per cent, from 10 per cent previously.

Rabobank New Zealand senior analyst Hayley Moynihan said that while this was the first decline in confidence witnessed in the past five bi-monthly Rabobank/Nielsen Rural Confidence Surveys, farmer confidence remained well above the levels recorded 12 months ago.

"The weakening in farmer sentiment is likely to be a reflection of the combined pressures of a persistently high New Zealand dollar which has been dampening returns from exports, the ongoing increase in key input costs and the prospect of a long, hot summer reducing feed availability for many regions," she said.

The largest falls in confidence were recorded among sheep and beef farmers, with 32 per cent of sheep farmers and 29 per cent of beef producers expecting economic conditions to deteriorate, compared to just 11 per cent and 16 per cent respectively in the previous survey.