Farmers Profit But Worry About Economic Future

Farmers in New Zealand are experiencing high profitability, but their confidence about the future has taken a hit. According to the latest survey by Federated Farmers, 72% of farmers are making a profit, with fewer than one in twenty making a loss.

The highest level of profitability since 2016 is largely due to strong returns from dairy, sheep, and beef farmers, which have been some of the main bright spots in an otherwise sluggish economy. However, confidence about wider economic conditions has slipped, with nearly 30% of farmers expecting conditions to worsen over the next 12 months.

The top concerns among farmers are rising input costs and on-farm inflation (33%), domestic politics and the election (30%), and regulation, compliance, and red tape (23%). The survey also found that dairy farmers are particularly pessimistic, with 39% expecting a downturn versus 18% of meat and wool farmers.

Despite these concerns, more than half of the surveyed farms plan to increase on-farm spending, and many expect to lift production. However, arable farmers are an exception, with only one in five reporting making a profit and nearly one in four expecting a loss.