The latest survey of confidence in the rural sector shows farmers are becoming more positive about the economy.
The Rabobank survey shows 34% of the country's farmers expect the rural economy to improve in the year - up 2% since the final quarter of 2009.
The number of farmers expecting conditions to worsen fell from 26% previously to just 11% this survey.
Rabobank rural general manager Ben Russell says much of the improvement came from sheep and beef farmers, who are more optimistic about the outlook for their sectors.
Higher than expected lamb and beef prices have given farmers a boost, he says. Farm gate prices for lamb have averaged $80 a head compared with the $70 predicted at the start of the season, while beef prices have improved earlier than ususal.
Mr Russell says of the farmers expecting conditions to worsen, 39% blame the high New Zealand dollar and 14% are concerned about the drought.