A Federated Farmers survey taken in July is showing a significant jump in the number of farms making a profit which is good news for suppliers of agricultural machinery and equipment as well as farm vehicles.
The responses to the Research First study 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 to 55.4% percent, up from 27% in July 2016.
Notably, the percentage of all farms making a loss has substantially decreased by a factor of four to 9.6% in July 2017 compared to 42.5% in July 2016.
This reduction has been particularly evident 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 spokesperson Andrew Hoggard says this is consistent with a strong recovery in commodity prices and farm incomes since mid- 2016 for most agricultural products, and the continued absence of farm expense inflation.
The good news for the nation and the provinces is that a net 32.3% of farmers expect production to increase over the coming 12 months (up 16 points on the January survey).
A net 19.1% of farmers expect their on-farm spending to increase over the coming 12 months (up 17 points on January) according to Hoggard.
A net 35.9% of farmers expect to retire some farm debt over the next year, but on the downside, a net 25.6% 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 leapfrogged over farm gate and commodity prices (now in second place). The public perceptions of farming are third on the list of concerns, and the environment is fourth,” says Hoggard.
Hoggard 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.
