Extreme spring weather has sent farmer confidence plummeting.
A spring and early summer cocktail of snowstorms, floods and drought has sapped farmer confidence for a third consecutive quarter, Rabobank Rural Confidence survey says.
In the latest survey, 29% of farmers expect the performance of the sector to improve in the coming year, down from 37% in the second quarter, while those expecting it to worsen increased from 13% to 18%.
Rabobank manager Ben Russell said confidence had evaporated with September's storms and the associated heavy stock losses in Southland, South Otago and the central North Island and then dry conditions in the north of the North Island.
"It is clear that the impact of a poor spring and a very early and dry start to summer is likely to be the greatest negative impact on the agricultural economy and production over the next year," he said.
The dairy sector had been hit hard, he said, with confidence falling from 42% in the last survey to 31%.
The same percentage of sheep and beef farmers, 31%, was confident about the future, but this, too, was lower, down from 38% in the last survey.
The survey found 35% of sheep and beef farmers expect their business to improve in the coming year, which Mr Russell said could be due to an expected lift in lamb prices following the heavy losses during the spring storms.
The survey found 21% expect their business to worsen.
Of those farmers who expect the agricultural economy to worsen, 51% cited drought and 29% higher input costs.
Respondents said the three factors which would influence their viability over the coming year were the weather, high commodity prices and exchange rate fluctuations.
Investment intentions remain high, with 65% expecting to maintain investment levels (65% in the last quarter).
Those expecting to increase investment was steady at 21% (22%), and those reducing investment was steady at 14%.
