Federated Farmers’ latest Farm Confidence Survey showed falling interest rates, rising incomes and more favourable farming rules all played a major role in that improvement.
"I’ve definitely noticed a significant shift in the mood of rural New Zealand. Farmers are feeling a lot more positive," Federated Farmers president Wayne Langford said.
"The last few years have been bloody tough for a lot of our farming families, with falling incomes, rising interest rates and unpaid bills starting to pile up on the kitchen bench.
"At the same time, we’ve also been struggling with an incredibly challenging regulatory environment and farming rules that haven’t always been practical, affordable or fair.
"These survey results paint a clear picture of a sector finally able to breathe a sigh of relief as some of that weight is lifted."
The January survey shows farmers’ confidence in general economic conditions has surged from a deeply negative -66% in July 2024 to a net positive score of 2%.
This marks the largest one-off improvement since the question was introduced in 2016.
Meanwhile, a net 23% of farmers now expect better economic conditions over the next year — the highest confidence level since January 2014.
There has also been a sharp lift in profitability, 54% of farmers now reporting making a profit — double the number in the last survey six months ago.
Mr Langford said it was important to note that, despite confidence being at its highest point in more than a decade, it was still only just in the positive.
"It’s been a remarkable recovery in farmer confidence over a short period of time, but I’m very conscious that we were coming off an extremely low base.
"We’ve come a long way, but there’s a long way to go yet. Federated Farmers will keep pushing hard to cut costs out of farmers’ businesses and reduce some of that regulatory burden."
The survey results show regulation and compliance costs remains the greatest concern for farmers, followed by interest rates and banks, and input costs.
"When it comes to farmer confidence, a lot of it comes down to what’s coming into our bank account, and what’s going out the other side. It’s a simple equation.
"A lot of that is market driven, and farmers are used to riding those highs and lows, but government rules and regulations have a significant impact on farmers’ costs.
"Those compliance costs really can make or break your season and have a significant impact on a farmer’s confidence to keep investing in their business.
"The government have made a great start cutting through red tape for farmers and repealing a lot of the most unworkable rules, but there’s still a lot of work to be done," he said.
Interest rates and banking issues have consistently been a top concern for farmers, which is why Federated Farmers fought so hard for a banking inquiry.
"Interest payments are a huge cost for most farming businesses and farmers have been under massive pressure from their banks in recent years.
"We want to see the government take a much closer look at our banking system and whether farmers are getting a fair deal from their lenders."
The survey shows farmers’ highest priorities for the government are the economy and business environment, fiscal policy, and reducing regulatory burdens.
— APL
