Farm confidence has continued to decline since the start of the year, with debt, interest rates, and banking concerns causing the greatest anxiety for Kiwi farmers, according to Federated Farmers’ latest survey.

The Farm Confidence survey, conducted among 1400 dairy, sheep, beef, and arable farmers, revealed that confidence remains stuck at historically low levels.

Federated Farmers national president Wayne Langford said “It’s incredibly frustrating to see farmer confidence still sitting at these stubbornly low levels.

“Unfortunately, these survey results are just reflecting how farming families are truly feeling out there at the moment. Farmers have really been doing it tough for some time now, with high interest rates, low commodity prices, and sky-high input costs making it really hard to earn a living.

The survey, carried out in mid-July, found that more farmers consider the current economic climate to be ‘bad’ compared to January. This marks the second-worst result in the survey’s history, with the lowest being in July 2023. More than half of the farmers surveyed expect economic conditions to deteriorate in the coming year, slightly worse than the outlook in January.

“Restoring farmer confidence is a huge focus for Federated Farmers. It’s what gets me out of bed each morning, feeling motivated to make a difference,” Langford said.

“We clearly have a big job ahead of us, but we’re up for the challenge. We’ll keep pushing hard to improve the lives of farming families across the country. The Government has done a lot of work repealing and rewriting some of the most unworkable regulations, but there’s still so much more to be done.”

The six-monthly survey indicates that regulation is not the only factor eroding farmer confidence. Langford noted that other issues, including banking concerns, high interest rates, soft farm-gate prices, difficulty finding staff, and the general economic outlook for the country, are also having a significant impact.

“Farmers will also be watching interest rates closely and desperately hoping for a rate cut later this year to help relieve some of the pressure they’re feeling,” he added.

The survey painted a bleak picture of farm profitability, with just over a third of farmers making a loss, 27% reporting a profit, and 39% breaking even. More than half of the farmers expect their profitability to decline over the next 12 months.

“In this July survey, about half of farmers told us their mental health and wellbeing is being affected by worries about things like interest, farm-gate prices, and regulation. We want to see farmers thriving and feeling confident, not lying in bed stressing about how to pay their bills and keep the lights on. When farmers lose confidence, they cut their spending and shave costs from their business, and that has major flow-on effects for the wider economy.”

Farmers surveyed identified their biggest concern as debt, interest, and banks.

“This is consistently coming through as the main issue for farmers, which is why we have pushed so hard for an independent inquiry into rural banking. It’s great the Government has given an inquiry the green light, but farmers actually want to see action and for changes to be made to the system.”

The survey also highlighted serious challenges in recruiting staff, particularly for dairy farmers in the midst of calving.

“It’s concerning that farmers are finding it much harder to recruit skilled and motivated staff over the past six months than the previous six months. It’s nearing crisis point this season, with recent changes to the Accredited Employer Work Visa scheme causing all kinds of issues,” Langford said.

Other significant concerns for farmers include reduced farm-gate and commodity prices, regulation and compliance costs, and rising input costs. Federated Farmers have committed to continue working with the Government to urgently address these issues and restore farmer confidence.

Key Survey Findings:

• 69% of farmers consider the current economic conditions to be ‘bad,’ an 11-point deterioration, marking the second-lowest figure recorded in the survey’s history.
• One-third of all farmers are making a loss, with just over one in four reporting a profit.
• Farmers report this is the hardest time to recruit skilled and motivated staff in more than a decade, with recruitment now at its lowest level since July 2012.
• The greatest concern for farmers is Debt, Interest & Banks, followed by Farmgate & Commodity Prices; Regulation & Compliance Costs; and Input Costs.
• Farmers prioritise the Government addressing Economy & Business Environment, Fiscal Policy, and Regulation & Compliance Costs.