Sheep and beef farmers were the most pessimistic, the survey indicated. Photo: RNZ / Nate McKinnon
Farmer confidence still low, but ticking upwards.
While farmer sentiment is improving, it's still low overall, with 58 percent expecting conditions in the agricultural economy to worsen over the coming year, according to Rabobank's fourth quarter Rural Confidence survey.
That's down from 77 percent last quarter.
Of those farmers, around half said falling commodity prices and rising input prices were their main concerns.
About 11 percent of all farmers surveyed expected conditions to improve this coming year - up from 5 percent previously - and they said government policy inspired the optimism. The survey was taken in late November when the new government's three-party coalition was being formed.
Rabobank analyst Emma Higgins said that was largely driven by dairy farmers who are feeling more confident - after global dairy prices plunged in August, prompting historic lows in farmer confidence the following month.
"It was dairy farmers who've really moved the needle the most having recorded the biggest lift in sentiment and we think this is largely down to healthier global dairy trade results throughout the months of November and also October when the survey time period was released.
"We saw across this time period that dairy commodity prices pushed a lot higher and that's been one of the factors that's contributed to the upwards revision that we've seen come through from Fonterra in regards to its forecast farmage milk price."
But Higgins said overall farmer sentiment was still low, especially for sheep and beef farmers.
"Unfortunately, sheep and beef farmers are at the other end of the scale and they're the most pessimistic when they're looking ahead.
"What we're seeing is beef prices have held up okay, but it hasn't been the case so much for the lamb schedule and unfortunately for our lamb or sheep farmers, they've received prices that are really low and in some cases they haven't seen pricing this low since 2016."
