Farmers have a gloomy view of the national agriculture economy, according to Rabobank's latest rural confidence survey.
Uncertainty in global markets and softer commodity prices, combined with the expectation that the run of good seasonal conditions cannot continue, has taken its toll.
The survey - taken in late June - showed more than a third of farmers expect the agricultural economy to worsen in the coming 12 months, compared to 27 per cent in the previous quarter. While half of the surveyed farmers expect stable conditions, only 11 per cent expect conditions to improve - down from 17 per cent previously.
Rabobank New Zealand chief executive Ben Russell said the further fall in confidence reflected global uncertainty.
"For many, coming out of a season where the planets aligned in terms of climatic conditions and commodity prices, many are pragmatic in their outlook that these conditions are unlikely to be repeated. Farmers have also seen commodity prices come back off their more recent highs, while the New Zealand dollar has remained very strong," he said.
Farmers remain more optimistic about the performance of their own farm business than that of the economy, although this confidence index has fallen into negative territory for the first time since May 2009.
While half the respondents expect their farm performance to remain stable, 21 per cent are expecting an improvement and 29 per cent are anticipating a poorer farm business performance.
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