Farmer optimism about the outlook for the rural economy has taken another knock in the latest Rabobank confidence survey.
The survey earlier this month found only 33% of farmers expected the agricultural economy to improve in the next 12 months, down 2% from the previous survey and 15% from the one before that.
Those expecting conditions to worsen rose from 10% to 12%.
Rabobank New Zealand head Ben Russell says financial instability in the northern hemisphere was again the main contributor to the drop.
The survey showed that sheep and beef farmers remain the most optimistic about the outlook over the next year.
The horticulture sector is the least optimistic, continuing a negative trend seen in the past three surveys.
Mr Russell says dairy farmer confidence dipped slightly, due to their expectation that record commodity prices will not continue through 2012.