Flicker of cautious optimism as farmers look to next year

• Published date: 27 March 2024
• Publication title: Central Rural Life

Federated Farmers’ latest survey shows the rural mood has reached positive territory since last year’s lowest point in the survey’s 15-year history

National president Wayne Langford said it was good to see the first improvement in confidence for some time.

‘‘I want to be clear that it’s only a slight improvement and it’s coming off a very low base. I wouldn’t say farmers are feeling more confident yet — they’re just feeling less unconfident. Confidence is no longer going backwards, but it’s still in the gutter.’’

Mr Langford said farmers were struggling with the weight of high inflation, high interest rates and lower commodity prices on their profitability.

Most farmers continue to feel general economic conditions were bad, and most were still making a loss. However, they expected conditions to improve over the next year.

Mr Langford said the turnaround was because inflation was slowing, commodity prices appeared at least for dairy to have stabilised and the belief that high interest rates had hopefully peaked.

‘‘We’ve also seen a change of Government in the last six months, with a real commitment to roll back some of the more impractical and expensive regulation that’s undermined farmer confidence.’’

This view lines up with the results of Rabobank’s confidence survey showing farmer sentiment has risen strongly from a low level for the second quarter year in a row.

The bank found more farmers believed the performance of the agri-economy would worsen in the coming year than those expecting it to improve.

However, confidence is much higher than in September last year when it slumped to a 20-year low.

The survey found 38% of farmers were expecting conditions in the broader agricultural economy to worsen over the next year — down from 58% last quarter — with 22% expecting conditions to improve, from 11% previously. The remaining 39% expected conditions to stay the same.

Chief executive Todd Charteris said it was encouraging to see confidence improving even if it was well back on where people would like to see it.

He said government policy was the major factor encouraging those farmers with an optimistic outlook.

Rabobank has lifted its milk price forecast for the...