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Farming: Otago-Southland farmer confidence leads the way

14 Aug 2018

In the last two weeks we have seen two surveys published on famer confidence. It is a very positive outlook, although the headlines tended to be negative.

In every walk of life, we have people who are optimists while others are more pessimistic. In my recent study of retired farming couples, the most successful farmers were, in their own words, relentlessly optimistic about farming and life in general.

The Federated Farmers Farm Confidence Survey July 2018:

  • There was an overall rise in farmer confidence from the January 2018 survey. For the first time in the survey’s history (9 years) farmer optimism has risen in all areas except their perception of the economy in 1 years’ time.
  • Current conditions were strongly positive – 88% of farmers believe that current economic conditions are ‘good’ or ‘okay’.
  • Although farmers are generally optimistic, the number that are pessimistic about the future state of the economy 1 year ahead has increased to 46% of farmers. This reflects some negativity about the new government’s approach to issues affecting farming such as environmental policy and the Emissions Trading Scheme and probably Mycoplasma Bovis. 52% of farmers overall still expect economic conditions to improve or stay the same in 1 years’ time.
  • Looking ahead one year, only sheep and beef farmers are more pessimistic than optimistic overall. Sheep and beef farmers do not expect good farmgate prices to continue. All other farmer groups are expecting to be the same or better off in a year.
  • Two-thirds of farmers are making a profit, 28% are breaking even, with less than 8% making a loss.
  • Less than 10% of dairy farmers are making a loss compared to 60% in 2016.
  • 30% of farmers expect profit to improve over the next year. 48% expect profit to stay the same.
  • Dairy and cropping farmers expect their profits to increase over the next year while the other farmers expect their profits to remain the same.
  • Otago-Southland farmers’ expectations of farm production has increased.
  • No increase expected for farm spending.
  • 91% of farmers have some debt.
  • Dairy farmers predict the largest decrease in farm debt over the next year and they have the highest levels of existing debt.
  • Sheep and beef farmers have the lowest levels of debt.
  • Otago-Southland is the most confident region overall.
  • Horticulture is the most confident farm sector; sheep & beef the least confident about the future.
  • Big problem for farmers is recruiting skilled and motivated staff.
  • Greatest concern for farmers is ‘regulation and compliance costs’.
  • Farmers have become more focused on pests, disease and biosecurity.
  • Farmers have become more concerned about the political situation including government intervention into farming through environmental policy and the Emissions Trading Scheme.
  • The highest government priority identified by farmers is biosecurity.

Rather a lot of bullet points. Sorry about that. But what a great result for farming overall. Farmers are generally hugely positive and in great shape, despite what the headlines said. Where there are problems and anxieties the optimistic farmers will find solutions and opportunities.

Every cloud has a silver lining. It is just a matter of finding it.

Keep asking great questions …

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