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Farmer confidence reading plunges to new record low

Results at a Glance

  • Farmer confidence in the broader agri economy has fallen and now sits at a new record low reading.
  • Among the more than three-quarters of farmers expecting agri industry conditions to worsen in the year ahead, the major concerns cited were falling commodity prices (54 per cent), rising input costs (46 per cent) and government policy (35 per cent).
  • Farmers’ confidence in their own farm business performance also fell to a new record low reading off the back of plummeting sentiment among dairy farmers and sheep and beef farmers.
  • Growers bucked the downwards trend and were significantly more optimistic about the performance of their own operations.
  • Farmers’ self-assessment of their own farm business viability decreased, while investment intentions were also lower.

Bruce Weir

Rabobank New Zealand Country Banking General Manager. Bruce Weir

Rising concern over the outlook for agricultural commodity prices in the year ahead has pushed New Zealand farmer sentiment to a new record low reading, the latest Rabobank Rural Confidence survey has found.

The latest survey — completed late last month — found farmer confidence in the broader agricultural economy was well back on the already low net confidence reading recorded in June 2023 (-57 per cent) and now sits at -72 per cent..

The latest net reading is the lowest reading in the 20-year history of the survey, eclipsing the previous record low of -71 per cent recorded in quarter four of last year.

The survey found 77 per cent of farmers were expecting conditions in the broader agricultural economy to worsen over the next 12 months (up from 65 per cent last quarter) with only five per cent expecting conditions to improve (from eight per cent previously). The remaining 15 per cent expected conditions to stay the same (24 per cent previously).

While a swathe of farmer concerns was contributing to record low sentiment, Rabobank New Zealand Country Banking General Manager Bruce Weir said lower commodity prices had now emerged as the chief source of farmer anxiety.

“Following our last survey in late-June, we saw Fonterra lower the mid-point of their farmgate milk price forecast from $8.00kg/MS to $6.75kg/MS, while schedule prices for sheep and beef products have also tumbled,” he said.

“And it was not surprising to see more than half of farmers (54 per cent) with a negative outlook identifying ‘falling commodity prices’ as a reason for their pessimistic view on the year ahead.

“Fonterra’s subsequent revision of the milk price earlier in the week to a new mid-point of $7.25kg/MS was a significant boost for the industry, however this lift was made after the survey period and is therefore not reflected in the latest results.”

The survey found farmers second most-pressing concern was rising input costs (46 per cent).

“Prices for key farm inputs like fertiliser, fuel and feed all remain stubbornly high and, with farm income now significantly lower, farmers’ central focus at the present time is on identifying how they can strip unnecessary costs out of their businesses over the months ahead.”

Mr Weir said other key concerns cited by farmers in the latest survey were Government policies (35 per cent), overseas markets (29 per cent) and ‘rising interest rates’ (18 per cent).

“This was the first time since mid-2020 that we’ve seen Government policy slip outside the top two reasons for farmer concern, while, on the flip side, we also saw Government policy cited as the major reason for optimism among the small percentage of farmers expecting broader agri economy conditions to improve over the coming 12 months,” he said.

Rabobank support


Mr Weir said the results of the latest survey reflected the incredibly tough conditions facing primary producers at the current time.

“Given all the challenges facing industry participants, it’s important to reaffirm Rabobank’s commitment to our food and agri clients and to the wider sector,” he said.

“As a long-term banking partner to agriculture in New Zealand and around the world, we are experienced in dealing with the cyclical downturns in agriculture and understand the current downturn is all part and parcel of lending to the industry.”

“Our immediate focus is to understand how the current environment is impacting our clients’ businesses, communicate with them effectively, and to keep them connected to the longer-term sustainability of their operations while they’re making short-term financing decisions.”

To help support famers’ financial decision making, Mr Weir said, the bank had recently launched module two of its Financial Skills Workshops – an ongoing series of workshops that kicked off in 2021.

“These free one-day workshops are open for attendance by Rabobank clients and non-clients and help farmers plan for, and respond to, scenarios where cashflow deviates from budget in the current season,” he said.

“Nineteen of these workshops have already taken place across the country this year and several more are scheduled for the remainder of 2023 and early 2024.”

Mr Weir also urged farmers not to overlook their own health and wellbeing in the current environment.

“Rabobank is involved with several initiatives in the rural health and well-being space, and we’ll continue to raise awareness of the various opportunities available for farmers to get off farm and to focus on their mental health.”

Own farm business performance


The survey found farmers were also less optimistic about the prospects for their own farm businesses with more than two-thirds of farmers now expecting this to worsen in the next 12 months.

“The overall net reading on this measure fell to -56 per cent – also a new record low reading – with this driven by lower confidence among pastoral farmers in their own farm business performance,” Mr Weir said.

“Across both the dairy and sheep and beef sectors, more than three-quarters of farmers are now expecting the performance of their own operation to deteriorate, and only one in 20 is expecting conditions to improve.”

One of the few bright spots in the latest survey, Mr Weir said, was the uplift in growers’ confidence in their own operations.

“Horticulturalists bucked the trend this survey recording an improved net score of +22 per cent on this measure, up from minus eight per cent previously,” he said.

“And one of the key factors likely to have contributed to this higher sentiment among horticulturalists, is recent improvements in Kiwifruit quality management which have helped drive Kiwifruit prices upwards this season.”

More farmers now identifying as unviable


The survey found more farmers now assessed their own farming business as unviable, while investment intentions were back on last quarter.

Twelve per cent of farmers viewed their farming operation as unviable this quarter (up from 8 per cent previously), while there was also a lift in the number of farmers assessing their operation as ‘just viable’ (40 per cent from 38 per cent last quarter).

“The survey also found investment intentions had contracted with only six per cent of farmers now expecting to increase investment and 40 per cent expecting it to decrease,” Mr Weir said.

Conducted since 2003, the Rabobank Rural Confidence Survey is administered by independent research agency TNS, interviewing a panel of approximately 450 farmers each quarter.


Rabobank New Zealand is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 120 years’ experience providing customized banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 38 countries, servicing the needs of about 8.6 million clients worldwide through a network of close to 1000 offices and branches. Rabobank New Zealand is one of the country's leading agricultural lenders and a significant provider of business and corporate banking and financial services to the New Zealand food and agribusiness sector. The bank has 27 offices throughout New Zealand.


Media contacts:

David Johnston
Marketing & Media Relations Manager
Rabobank New Zealand
Phone: 04 819 2711 or 027 477 8153

Denise Shaw
Head of Media Relations 
Rabobank Australia & New Zealand 
Phone: +612 8115 2744 or +61 2 439 603 525