3 Aug 2011

Farmer confidence peaks, but still historically high

7:34 am on 3 August 2011

The latest quarterly survey by specialist food and agribusiness bank Rabobank has found improved prices for farm products are helping to keep farmer optimism at a high level but the high New Zealand dollar is starting to take the edge off that.

Waikato and King Country regional manager for Rabobank, Paul Lamont says farmer confidence has plateaued in its latest quarterly survey, but is still running at an historically high level, based mainly on the expectation that the good farm returns will continue.

He says it is based on historically high prices for lamb and good returns for dairying. A good autumn had added to optimism.

Mr Lamont says, however, that the rising dollar is a reason farmer optimism has plateaued. When the survey was done, the Kiwi dollar was at US80 cents and is now at around US87 cents.

However, not all producers are so optimistic about their own future.

While 67% of the horticulturists surveyed expect the general rural economy to improve, fewer than 9% expect their individual businesses to get better.

Paul Lamont says that's because of the threat the kiwifruit disease PSA poses to the industry.