New Zealand farmer confidence has slumped as concerns about the global financial crisis and flagging commodity prices hit, according to the latest survey.
A Rabobank/Nielsen rural confidence survey conducted last month shows the number of farmers expecting the agricultural economy to worsen in the next 12 months is now 29%, up from 7% in the previous quarter.
The number expecting conditions to improve fell to 26%, down from 59% in the previous survey in September.
Rabobank rural general manager Ben Russell says farmers are well aware of the pressure that the global credit crunch will put on consumer spending, as well as the impact on demand for agricultural products in export markets.
He says the survey shows that while confidence had fallen across all agricultural sectors, the biggest decline was in the dairy industry.
The number of dairy farmers with a pessimistic outlook increased to 39%, compared with 4% in the previous quarter. Only 13% expect conditions to improve, compared with almost half previously.
Mr Russell says international commodity prices have fallen by between 25% - 35% since the last survey and dairy farmers recognise that the impact of this will flow through to the milk payout.
