Sheep farmer confidence has improved on the back of rising prime lamb prices, but pessimists still outnumber optimists.
The latest Rabobank-Neilsen rural confidence survey taken last month revealed 18% of New Zealand farmers expected the agricultural economy to improve in the coming year compared with 15% in the previous survey.
Rabobank rural manager Ben Russell said the number of sheep farmers expecting conditions to improve rose from 20% to 24%, while 34% expected conditions to worsen, down from 41% in the previous survey.
Mr Russell said peak-season lamb prices were about 10% higher than a year ago, despite the high exchange rate, which he said had helped underpin rising confidence.
More farmers expected interest rates to fall, 16% compared with 5% in the previous survey, but 31% still expected rates to rise, down from 45%.
Confidence increased among cropping farmers, but beef producers remained the most pessimistic, with 49% expecting the economy to deteriorate, up from 45% in the previous survey.
Mr Russell said this could reflect uncertainty among international markets and the high NZ-US exchange rate.
Dairy farmer outlook remained static with 14% expecting an improvement and 55% expecting conditions to stay the same, similar to earlier results.
Income expectations among farmers worsened, with 41% expecting incomes to fall compared with 37% last survey.
