Farmers are more upbeat about general economic conditions, but climate change policy is now their biggest concern – and they are struggling to find staff.
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Dairy is the most optimistic group regarding current economic conditions.

A net 17.9% of respondents consider current economic conditions to be good, a 12.4-point improvement from January 2021 and a 46-point increase on July 2020, when a net 28.6% considered conditions to be bad, according to the July 2021 Federated Farmers’ mid-season farm confidence survey.

Dairy is the most optimistic group regarding current economic conditions.

Federated Farmers president Andrew Hoggard noted, however, the Global Dairy Trade price index fell 1% in the latest auction, following 3.6% and 2.9% falls in July auctions.

A total of 63.4% of farmers are currently profitable, up 4% over the past six months. This result is similar to July 2018 levels. A further quarter are just breaking even, while only 8% report making a loss.

A net 4.3% of respondents expect their profitability to improve over the next 12 months, a 23-point increase on the January 2021 survey, when a net 18.3% expected it to decline.

A net 32.6% of respondents expect their spending to increase in the year ahead, a level not seen for 10 years.

While stronger spending intentions reflect expectations about profitability, some of it will be related to concern about higher farm input costs.

“It seems many farmers will be using those returns to try and get their debt down in the face of the tightening attitude from banks. A net 29.3% of respondents expect their debt to reduce over the next 12 months,” he said.

Meanwhile, a net 48.8% of respondents reported it has been harder to recruit skilled and motivated staff, a 13-point increase on the January 2021 survey when a net 35.8% reported it had been harder.

“Continued immigration restrictions from the pandemic are still exacerbating the problem, although some limited border exemptions have been allowed for ‘essential’ highly-skilled workers. In addition, not many New Zealanders appear to be interested in remote work and the rural lifestyle,” the survey said.

The three greatest concerns for farmers are climate change policy and the Emissions Trading Scheme (chosen by 18.5% of respondents), followed by regulation and compliance costs (17.1%), and freshwater policy (11.0%).

“The climate change issue has leapt from number three to number one since January, and probably the anger over the climate/electric vehicle-related ute tax is wrapped up in that,” he said.

The three highest priorities farmers would like the Government to address were regulation and compliance costs (14.0%), economy and business environment (13.1%), and supporting agricultural exporters (10.4%).

The July 2021 survey was completed for Federated Farmers by Research First and the online survey received 1422 responses from farmers.

Dairy products and, in particular, grass-fed products are performing strongly post-covid in overseas markets.

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