Farmers more confident but cautious on spending

The weaker kiwi dollar means farmers are far less pessimistic about the year ahead, but don't expect a major spend-up from them just yet, says rural lender Rabobank.

The latest Rabobank/ACNeilsen rural confidence survey showed that last month, a net 12 per cent of farmers expected things to get worse. That figure was down 60 percentage points on February and was the sharpest improvement in farmers' views since June 2004.

Overall, 42 per cent of farmers thought the economy would stay the same, 23 per cent thought it would be better and 35 per cent worse.

But Rabobank senior analyst Hayley Moynihan wants to see a further building in confidence before confirming a firm upward trend - and she expects farmers to remain cautious with spending despite the confidence improvement.

"Entering into budgets for this coming season, farmers will continue to be reasonably conservative," she said.

However, Rabobank said a quarter of dairy and beef farmers and 12 per cent of sheep farmers were looking at more investment.

Moynihan said recent positive factors for farmers included a rise in payout for meat, Fonterra lifting its final payout forecast and improvement in deer and wool prices. But 90 per cent of farmers expected increased costs.

Delightful dollar

* The dollar's dip has boosted rural confidence.

* A net 12 per cent of farmers were negative last month, against 72 per cent negative in February.

* But farmers' spending is tipped to remain "conservative".