Farmer confidence fell in the past three months on the back of election uncertainty and a slight shift in sheep and beef markets.
The third quarterly Rabobank survey interviewed about 450 farmers and found that net farmer confidence has fallen to 38 percent from the record high of 54 per cent recorded in June.
It showed that the number of farmers expecting the agricultural economy to improve in the year ahead has fallen to 46 percent compared with 57 percent in the previous quarter, and those expecting agricultural economic conditions to worsen rose from three percent to eight percent of farmers surveyed.
Blake Holgate from Rabobank said while overall rural confidence was still high, it has slipped slightly since June.
"Of those who sited a more negative outlook government interventions and government policies featured highly among the respondents.
"There's been a lot of rhetoric and awareness around farming and some of the policies that may impact farmers within the farmgate and a broader impact within the farming sector ... just come uncertainty around how that will play out post-coalition."
Sheep and beef farmer confidence fell sharply with the net confidence reading dropping from 53 per cent last quarter to 22 per cent in this survey.
"A couple of reasons for this I think, commodity prices in the beef space have eased slightly over the last quarter ... and possibly with growing awareness around some of the potential impacts of political intervention that could happen to sheep and beef farmers as well."
In other sectors, dairy farmers were still positive about the outlook for their own businesses and horticulturists confidence in their businesses has climbed from 38 to 51 percent.
Overall farmers investment intentions over the next 12 months also dropped back this survey, after reaching record levels last quarter.
The net investment measure has fallen by 13 percent to 22 per cent in this survey.
Federated Farmers said this week that some farmers were "genuinely worried" about the uncertain outcome of the election and were keeping their wallets in their pockets.