Farm confidence has fallen since the start of the year, with debt, interest rates and banks causing the greatest concern, Federated Farmers says.

The advocacy group has released its latest Farm Confidence survey of 1400 dairy, sheep, beef and arable farmers, which shows confidence remains stuck in historically low territory.

“It’s incredibly frustrating to see farmer confidence is still sitting at these stubbornly low levels,” Federated Farmers national president Wayne Langford said.

He said the survey results reflected how farming families were truly feeling at the moment.

“Farmers have really been doing it tough for some time now, with high interest rates, low commodity prices and sky-high input costs making it really hard to earn a living.”

Langford said while Federated Farmers was encouraged by a slight lift in farmer confidence in its January 2024 survey, things had since gone backwards.

He said restoring farmer confidence was “a huge focus” for Federated Farmers.

“We’ll keep pushing hard to improve the lives of farming families across the country.”

Langford said there was still “so much more to be done” even after the Government’s work repealing and rewriting some regulations.

The survey, which comes out every six months, shows not only regulations were eroding farmer confidence, he said.

“There are a whole range of other issues that are also having an impact.

“These include concerns about banking, high interest rates, soft farmgate prices, the ability to find staff, and the general economic outlook for the country.

“Farmers will also be watching interest rates closely and desperately hoping for a rate cut later this year to help relieve some of the pressure they’re feeling.”

Carried out in mid-July, the survey found more farmers consider the present economic climate to be “bad” compared with January.

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This is the second-worst result in the survey’s history, with the lowest being in July last year.

The survey showed confidence in the future was also low.

Over half the farmers surveyed expected economic conditions to deteriorate in the year ahead, slightly worse than in January.

Langford said the survey painted a bleak picture of farm profitability.

“Just over a third of farmers are making a loss right now, while only 27% say they’re making a profit and 39% breaking even.

“If that’s not bad enough, more than half of farmers expect their profitability to decline over the next 12 months.”

He said this wasn’t good news for New Zealand’s economy.

“When farmers lose confidence, they cut their spending and shave costs from their business, and that has major flow-on effects for the wider economy.”

Farmers surveyed said debt, interest and banks were their biggest concerns.

“This is consistently coming through as the main issue for farmers, which is why we have pushed so hard for an independent inquiry into rural banking.

“It’s great the Government have given an inquiry the green light, but farmers actually want to see action and for changes to be made to the system.”

The survey also shows farmers were having serious challenges recruiting staff.

“Finding skilled staff is a major issue, particularly for dairy farmers who are in the thick of calving right now,” Langford said.

“It’s nearing crisis point this season, with recent changes to the Accredited Employer Work Visa scheme causing all kinds of issues.”

Other concerns for farmers include reduced farmgate and commodity prices, regulation and compliance costs, and rising input costs.

Federated Farmers’ Farm Confidence survey is done twice a year, in January and July, and this is the 31st survey.

See the full results at fedfarm.org.nz/FarmConfidence.

Farm Confidence Survey: Key findings

• - 69% of farmers consider the present economic conditions to be “bad”, an 11-point deterioration. This is the second-lowest figure recorded in the survey’s history.
• - One-third of all farmers are making a loss, with just over one in four farmers reporting a profit.
• - Farmers say this is the hardest time to recruit skilled and motivated staff in more than a decade, with the ability to recruit now sitting at the lowest level since July 2012.
• - Debt, interest and banks are the greatest concerns for farmers right now; followed by farmgate and commodity prices, regulation and compliance costs, and input costs.
• - Farmers say the three highest-priority areas for the Government to address are the economy and business environment, fiscal policy, and regulation and compliance costs.