Federated Farmers Banking Survey May 2021

  • Most farmers remain satisfied with their banks, largely led by arable and meat & wool farmers. But farmers’ satisfaction with their banks decreased slightly over the past six months and has been slowly eroding over time. Other industry farms were the least satisfied farm group. Yet, sharemilkers’ satisfaction with their banks increased over the past six months.
  • Most farms have a mortgage, and there was a slight increase in proportion with mortgages over the past six months. Unlike previous surveys, when dairy farms were more likely to have mortgages than non-dairy farms, arable farms have become the group with the largest proportion of mortgages.
    Although most farm groups had a small increase in farms with a mortgage, dairy farm groups had a small decrease.
  • Over the past six months, the average all farm mortgage value has increased to $4.3 million, and the median value increased to $2.2 million. There were increases in both metrics for meat & wool and arable farms and declines for dairy and other industry farms. Arable farms continue to have the highest proportion of mortgages over $20 million.
  • The average mortgage interest rates have decreased slightly to 3.8%, showing the ongoing effect of last year’s OCR cuts. Meat & wool saw the largest decrease in mortgage interest rates. The maximum mortgage
    interest rate reported was 8%, but 91% of farms have mortgage interest rates under 5%.
  • Most farms continue to have an overdraft facility, averaging $193,000. This is a $7,000 decrease since November 2020. But the median value remains stable at $100.000. Arable and other industry farms have the largest overdraft facilities (average of $517,000 and $327,000 respectively) and sharemilkers the smallest (average of $74,000).

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