Farmer confidence improves slightly in July

Just under 38pc of respondents told surveyors that commodity and farmgate prices were their biggest single concern. Photo / Mark Mitchell

Farmers' confidence improved a little since January but remains weak, with commodity and farmgate prices forming their biggest concern, according to a Federated Farmers survey.

The survey was conducted immediately after Britain's decision to exit the European Union and this appears to have dampened farmer confidence in the global market, on top of their existing concerns about the domestic scene, Federated Farmer's president William Rolleston said.

"The strength of the global economy, post Brexit, is weighing heavily on farmers' expectations," he said in a statement.

Just under 38 per cent of respondents told surveyors that commodity and farmgate prices were their biggest single concern.

Other major areas of concern were regulation and compliance costs, health and safety requirements and resource management issues, especially freshwater management, Federated Farmers said.

The survey showed farmers' spending intentions for the coming year remain negative and have barely budged since the last survey in January.

A net 16.3 percent of farmers expected to increase their debt rather than reduce it, which is a slight improvement from in the January survey.

Rolleston said the primary sector needed the ongoing support of banks. Federated Farmers would continue its quarterly member surveys on banking relationships and behaviour, he said.

A large number of respondents - 13.3 percent - said they believed the government's highest priority should be trade policy.

This included calls on it to negotiate new free trade agreements and to protect market access into the European Union and the United Kingdom post-Brexit.

This was followed closely by monetary policy on 12 percent - a reflection of the high exchange rate - and then regulation and compliance costs on 11.7 percent.

The survey also showed that 71 percent of respondents expect their farm's profitability to stay the same or improve over the next 12 months.

About 74 percent expected general economic conditions to stay the same or improve over the next 12 months.

A net 14.7 percent of respondents expected to increase production over the next 12 months and a et 26.5 percent expected to reduce on-farm spending over the next 12 months.