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Concern over the impact of Mycoplasma bovis disease on the country's agriculture sector has reduced New Zealand farmers' confidence in the last quarter, according to the latest Rabobank Rural Confidence Survey [19659002]. The latest report, completed last month, revealed that the number of farmers was expecting an improvement in the rural economy over the next 12 months (+15 percent). The unemployment rate fell slightly from 27% in the last quarter to 26%, while the number of people expecting a deterioration in the rural economy rose from 12% to 24%. A total of 46% expected similar conditions (versus 59%).
Rabobank New Zealand General Manager for Country Banking, Hayley Gourley, said New Zealand's rural confidence was now in equilibrium with the number of "The strength of commodity prices in virtually all sectors continues" to support farm profitability and farmers 'optimism, but, despite positive generalized returns, uncertainty According to Ms Gourley, a key factor of farmers' uncertainty and the main reason for the 13% decrease in the reading of the farmers' safety net, she said.The impact of Mycoplasma bovis disease was observed
"On 24% of farmers who are waiting for it to the fact that the agricultural economy is deteriorating, 78% cite Mycoplasma bovis and the consequences "The intervention of the government was the second predominant reason for the pessimism of the farmers, but it was quoted much less It's frequently only during the previous quarters. "
Overall confidence in the agricultural economy as a whole was reduced by lower expectations among sheep and cattle producers and horticulturists. Net confidence fell sharply among sheep and cattle producers to -0% (against + 11% previously), while horticulturists dropped to -9% (vs. + 34% previously). Confidence among dairy producers remained strong, rising slightly to +14 percent (vs. +11 percent previously).
Ms Gourley said that one of the factors of confidence among dairy farmers was Fonterra's strong opening forecast of $ 7 / kg for 2018/19 season.
"Fonterra's opening forecasts were announced just before the start of this study and gave a positive tone for the coming year, while the industry continues to work at the same time. Eradication of mycoplasma bovis, "Spirits were further backed by weak dollar kiwi compared to the USD, helping to support favorable prices of milk on the farm."
For drystock farmers , and especially those who depend on trade or grazing Mrs. Gourley said that the greatest pessimism recorded during the quarter was due to uncertainty as to how the decision to eradicate Mycoplasma bovis would have a impact in the long term, it will be necessary to review their existing business models, but in the short term, there is still a high level of uncertainty as testing for the disease continues and ions of the continuous disturbance in the supply chain. "
The less optimistic outlook for the overall agricultural economy has been driven by farmers' expectations of the performance of their own farm business over the next 12 months, with a clear reading of this measure going on at + 29% (vs. + 36%).] The survey found that horticulturalists continued to have the most positive outlook on the performance of their own business over the next 12 months, recording a net unchanged reading of + 46% The dairy producers' net confidence in the performance of their own farm business increased to + 34% (vs. + 33%) while the net confidence of sheep and cattle farmers fell + 19% on this measure (+ 37% previously).
Ms Gourley said that despite lower expectations for the performance of their own companies, the farmers' investment intentions were slightly higher than the previous quarter.
"In all sectors, we saw the net worth of farm investments rise by one. Investment intentions were highest among horticulturalists, with a net reading of +41 percent, and 31 percent of respondents are now expecting to increase their investments over the next year and only six percent expect a drop, while sheep and beef farmers net increase of + 25% on this measure and dairy farmers by + 18%.
In addition to increased investment intentions, Mrs. Gourley said that
"Seventy-six percent of farmers surveyed have qualified their business as "easily viable" or "sustainable" this quarter, which is up 3% from the March 2018 survey and is the highest percentage since the introduction of this quest ion in early 2009. "
" This record reading of self-rated viability comes at a single time the lower level of confidence among farmers indicating uncertainty in the industry removes some of the shine. "
Conducted since 2003, the Rabobank Rural Trust Survey is administered by the independent research agency TNS, interviewing a panel of about 450 farmers each quarter
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