Survey shows big jump in number of farms making a profit
August 1, 2017
A few weeks of winter remain but the Federated Farmers July Farm Confidence Survey shows there’s a spring in the step of those who work the land.
The responses to Research First from nearly 800 farmers show the highest level of confidence in current general economic conditions since 2014. Dairy and arable farmers are the most optimistic looking forward and all regions are demonstrating more optimism compared to the last survey, in January this year.
Compared to 12 months ago, the proportion of farms making a profit has doubled (55.4% percent versus 27 percent in July 2016). Notably, the percentage of all farms making a loss has substantially decreased by a factor of four (9.6 percent in July 2017 compared to 42.5 percent in July 2016), particularly within dairy and ‘other’ farm groups (goats, rural butchers, high country, bees), and those farms based in the Auckland-Northland and Otago-Southland regions.
Federated Farmers Economics and Trade spokesperson Andrew Hoggard says this is consistent with strong recovery in commodity prices and farm incomes since mid- 2016 for most farm produce, and the continued absence of farm expense inflation.
Good news for the nation and the provinces is that a net 32.3 percent of farmers expect their farm production to increase over the coming 12 months (up 16 points on the January survey) and a net 19.1 percent expect their on-farm spending to increase over the coming 12 months (up 17 points on January), Andrew says.
A net 35.9 percent of farmers expect to be able to retire some farm debt over the next year but on the downside, a net 25.6 percent say it has been harder to find skilled and motivated staff this year.
"The survey showed the biggest concern for farmers is regulation and compliance costs, which has leap-frogged over farmgate and commodity prices (now in second place). The public perceptions of farming is third on the list of concerns and the environment is fourth."
Andrew says the survey shows that farmers rate reducing regulation and compliance costs as the highest priority for the government, followed by the economy and business environment, gaining re-election, and biosecurity.
For a full copy of the survey results, click here.