Is farm confidence on the up? | EP 4
Farm confidence has recovered from last year’s record lows but high interest rates, poor commodity prices, and regulatory costs are weighing heavily on farmers.
In this episode, we’re discussing Federated Farmers’ latest Farm Confidence Survey with our national president Wayne Langford and Auckland beef farmer Tim Dangen, who was 2022 Young Farmer of the Year.
Wayne says it’s good to see the first improvement in farmer confidence for quite some time, but that it’s only a slight improvement on the last survey in July 2023, when confidence plummeted to an all-time low.
“Things are up, but we’re coming off a very low base. I wouldn’t say farmers are feeling more confident yet – they’re just feeling less unconfident,” he says.
Langford explains that farmers are struggling with high inflation, high interest rates and lower commodity prices, and the impact that’s having on their profitability.
Most farmers are still feeling that general economic conditions are bad, and most are still making a loss, but there has been an improvement in the number of farmers who expect things will improve in the next 12 months, he says.
Langford goes on to say there are a number of drivers behind the farm confidence recovery, including inflation slowing, interest rates having peaked, and dairy prices stabilising.
The change in Government also seems to have helped, with a commitment to roll back some of the more impractical and expensive regulation that’s undermined farmer confidence, he says.
He’s optimistic this is the start of a genuine, steady increase in confidence.
Dangen says farmers are in “knuckle-down phase” and “weathering the storm” but he’s sensed the shift in rural confidence.
“I think farmers in general have started to adjust to the change in the climate.
“We're slowly becoming more used to it, and the change in Government has helped too with some of the regulatory load.”
He goes on to say these tight times have forced farmers to scrutinise their own businesses and find efficiencies.
His main concern is around how long the economic downturn could last.
If we're lucky, we'll be status quo by the end of the year, he says.
Langford and Dangen also discuss farmers’ biggest concerns right now, which the survey identified as: debt, interest and banks; farmgate and commodity prices; regulation and compliance costs; and climate change policy and the ETS.
Langford concludes by encouraging struggling farmers to reach out for help from the likes of Federated Farmers and Rural Support Trust.
Useful links:
fedfarm.org.nz/FarmConfidence
Rural confidence rises from rock bottom (farmersweekly.co.nz)