Farmer confidence dives to new low
Farmer confidence has slumped to its lowest level in 13 years because of rising costs, supply chain disruption and concerns over Government reform.
Of the more than 1200 farmers who took part in Federated Farmers’ latest survey, almost half said current economic conditions were bad.
Federated Farmers president Andrew Hoggard said inflation and supply chain disruption because of Covid-19 and Russia’s invasion of Ukraine were obvious factors.
‘‘But continued concern over the pace and direction of Government reform and regulation, plus staff shortages, are also contributing to uncertainty and gloom.’’
Federated Farmers has run twice-yearly farm confidence surveys since 2009. In January, it reported farmer confidence was at the lowest level recorded.
However, the July survey found it had dropped even further.
A net 47.8% of respondents considered current economic conditions to be bad, down 55.6 points from January when a net 7.8% considered conditions to be good.
A net 80.9% of respondents expect general economic conditions to worsen over the next 12 months, up 16.9 points on the January survey.
‘‘That’s not inconsistent with the results from other business confidence surveys,’’ Hoggard said.
Farmers identified their top concerns as climate change policy and the emissions trading scheme, regulation and compliance costs, input costs, and debt, interest and banks.
Biosecurity had also rocketed up the list of worries, following outbreaks of foot and mouth disease in Indonesia and Malaysia.
Despite the slide in confidence, farmers’ profitability expectations hadn’t taken as big a hit as might have been indicated.
A net 55% of respondents said they were making a profit – six points down on the January survey – but 53.1% expected their profitability to decline over the next 12 months, up 11.9 points on the previous survey.
Hoggard said that was to be expected, given the squeeze from higher input costs and high commodity prices retreating.
‘‘What’s also worrying is that for the first time in our survey’s history we’ve recorded a net negative score for production expectations.
‘‘A net 0.5% of farmers who answered our questions expect their production to decline over the next 12 months, down 2.3 points on the January result.’’
A net 54.6% of respondents expect their spending to increase over the next 12 months, slightly up on January, but that would be because of inflation of input prices rather than spending on more goods and services, Hoggard said.
Rising interest rates were also playing on farmers’ minds. A net 15.3% expected their debt to reduce over the next 12 months, down from 30.9% in January.
And although the survey indicated a slight easing in the labour market, things were still ‘‘very tight’’, Hoggard said.
A net 44.3% of respondents said it had been harder to recruit skilled and motivated staff over the past six months, down 4.3 points on the January survey.
‘‘Concern over the pace and direction of Government reform and regulation, plus staff shortages, are also contributing to uncertainty and gloom.’’
Andrew Hoggard
Federated Farmers president