KEY POINTS:
Optimism in the dairy sector fuelled by skyrocketing commodities prices has lifted overall farmer confidence, but beef and sheep farmers are gloomier than ever, says the latest Rabobank/Nielsen Rural Confidence Survey.
Although just 22 per cent of farmers expect the economy to improve in the next 12 months, the result is an improvement on the bi-monthly survey's figure of 9 per cent. But there is no dip in the number of farmers expecting economic conditions to worsen, which is steady on 43 per cent.
The April survey - taken before Fonterra announced an increase in its payout of 20 cents per kilogram of milk solids - shows 48 per cent of dairy farmers expect conditions to improve, up from just 12 per cent.
However, sheep and beef farmers are increasingly worried about low farm gate schedule prices, climbing interest rates and a high New Zealand dollar.
But Rabobank's Ben Russell described the forces driving down the lamb prices in particular as short term - the inflated kiwi and a record Australian lamb slaughter due to the Australian drought - and predicted better market conditions later this year and into 2008.
