Photo: RNZ / Richard Tindiller
The latest Federated Farmers Farm Confidence survey shows a slight improvement since the last survey in 2023, when confidence reached its lowest point in the survey's 15-year history.
But president Wayne Langford was at pains to point out the results showed more a feeling of being "less unconfident. Confidence is no longer going backwards, but it's still in the gutter".
Langford said now, only 21 percent of farmers expect their farm profitability to decline compared to 70 percent in the last survey.
"Farmers have pretty clearly laid out that their key concerns are high interest rates, poor commodity prices, regulation and compliance costs, and interestingly still climate change policy in last place, even though the discussion is starting to move on slightly on that topic.
"I guess the glimmer of hope is this is the first rise we've had in confidence in quite a few years, so that's good. The only problem is it's coming from the lowest base we've ever had, so good to see things on a rise but still a long way to go," Langford said.
One good move was farmers were also now able to "get their heads around inflationary costs", so as prices flatten out Langford said farmers are able to judge where their business was going.
"Where we are seeing a shift is in the number of farmers who expect things will improve in the next 12 months. So, times are tough, but there's a sense of cautious optimism."
Compared to last July, the January 2024 survey showed more farmers expect their production and spending to increase, and fewer farmers expect their debt to increase in the 12 months ahead.
"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," he said.
He was optimistic this was the start of a genuine, steady increase in confidence.
"It's all about cutting red tape, making compliance on-farm easier, and getting our primary sector humming again."
Langford said he was not surprised to see interest rates came out as the top concern as rural lending rates have gone up so much more than for residential.
He said that was why Federated Farmers was calling for an independent inquiry into rural banking.
"An inquiry would provide that transparency and give farmers some confidence that they're at least getting a fair deal from their bank."
