Farmer confidence has bounced back to where it was pre-Covid19 but attracting and retaining staff remains a headache, the latest Federated Farmers Farm Confidence Survey shows.
Of the nearly 1,100 farmers who completed the Research First survey in the second week of January, a net 5.5% considered current economic conditions to be good. That’s a 34-point jump from the July 2020 survey when a net 28.6% considered them bad, marking the lowest level of farmer confidence in the 12 years the six-monthly survey had been conducted.
“Looking ahead, a net 43.8% expect general economic conditions to worsen over the next 12 months. That sound a bit grim, but just six months ago 58.7% of survey respondents expected a deteriorating economy,” Federated Farmers President and commerce spokesperson Andrew Hoggard said.
“I think farmers, like other New Zealanders, are feeling buoyed by the way we’ve handled the pandemic despite the torpedo to international tourism. The agricultural sector is willing and able to maintain production so long as regulatory and other stumbling blocks don’t trip us up.”
The January survey showed the three greatest current concerns for farmers are regulation and compliance (chosen by 18.0% of respondents), followed by freshwater policy (16.7%), and climate change policy (13.6%).
“This questionnaire went out before the recent announcements by the Climate Change Commission. As the impacts of the draft emissions budgets, and the government’s reaction to them, become clearer, it will be interesting to see the results of our next survey in July,” Andrew said.
A net 35.8% of respondents reported it has been harder to recruit skilled and motivated staff, an 8-point increase from July 2020 when a net 28.1% reported it has been harder.
Other key findings from the January survey:
- Farm profitability: A net 49.3% of respondents reported making a profit currently, up from 46.7% in July 2020. Looking ahead, a net 18.3% expect their profitability to worsen over the next 12 months, a 17-point decrease from July 2020 when a net 35.5% expected it to decline.
- Farm production: A net 13.6% of respondents expect their production to increase over the next 12 months, down from 16.1% in July.
- Farm spending: A net 11.3% of respondents expect their spending to increase over the next 12 months, a 24-point increase from July 2020 when a net 12.8% expected it to reduce.
Consistent with recent commodity price movements, the improvement in farmer confidence was particularly strong for dairy farmers, with other farming groups more cautious about current conditions and less optimistic about future conditions. Farmers seem most confident in the Waikato-Bay of Plenty region.