Farm survey shows confidence subdued but steady

Farm survey shows confidence subdued but steady

Farmer confidence has picked up slightly since surveyed last in January but remains weak, according to Federated Farmers’ July 2016 Farm Confidence Survey.

The survey was conducted immediately after the Brexit decision and this appears to have dampened farmer confidence in the global market, on top of their existing concerns about the domestic scene, president of Federated Farmers Dr William Rolleston says.

"The strength of the global economy, post Brexit, is weighing heavily on farmers’ expectations.

"So not surprisingly, 37.8 percent of respondents told us commodity and farmgate prices were their biggest single concern."

Other major areas of concern were regulation and compliance costs, health and safety requirements and resource management issues, especially freshwater management.

The survey showed farmers’ spending intentions for the coming year remain negative and have barely budged since the last survey in January.

In the area of debt reduction, a net 16.3 percent of farmers expect to increase their debt rather than reduce it, which is a slight improvement from in the January survey.

"The primary sector needs the continued ongoing support of banks. Federated Farmers will continue its quarterly member surveys on banking relationships and behavior so we can continue to understand how these relationships are working for farmers."

Also not surprisingly, given the timing of the survey, the largest number of respondents (13.3 percent) said they believed the government’s highest priority should be trade policy.

This included calls on it to negotiate new free trade agreements and to protect market access into the European Union and the United Kingdom post-Brexit.

This was followed closely by monetary policy on 12 percent (a reflection of the high exchange rate) and then regulation and compliance costs on 11.7 percent.

No other priority attracted more than 10 percent of respondents, although housing came very close on 9.9 percent.

Read the survey results
Headline results from the July 2016 Farm Confidence Survey:

- Respondents’ biggest single concern was commodity and farmgate prices, cited by 37.8 percent of respondents.

- 71 percent of respondents expect their farm’s profitability to stay the same or improve over the next 12 months

- 74 percent of respondents expect general economic conditions to stay the same or improve over the next 12 months.

- About 20 percent of respondents found it harder to attract skilled and motivated staff in the past six months

- Respondents’ highest priority for government was trade policy, cited by 13.3 percent of respondents.

- A net 14.7 percent of respondents expect to increase production over the next 12 months.

- A net 26.5 percent of respondents expect to reduce on-farm spending over the next 12 months.

ENDS

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