Farmer confidence has continued to slide and remains in negative territory as the strong Kiwi dollar and lower commodity prices dampen rural expectations, says Rabobank.

The latest quarterly Rabobank rural confidence survey held late last month found 44 per cent of the country's farmers expect the agricultural economy to worsen over the next 12 months. This compared to 36 per cent in the previous quarter and 10 per cent at the same time last year.

Just 15 per cent expected economic conditions to improve.

Rabobank New Zealand chief executive Ben Russell said that while farm confidence had been on a downward slope since March last year, the latest survey was the first to show farmers now expected a greater negative impact on their own businesses.

It found 42 per cent of farmers expected their own business performance to worsen over the next 12 months compared to 29 per cent in the previous quarter, he said.

The high New Zealand dollar and falling commodity prices were the main triggers for farmers' falling confidence, cited by 50 per cent of farmers who expected conditions to worsen.

Overseas market conditions and rising farm costs were also a concern.

Among those farmers who had a positive outlook, confidence was driven by the expectation of positive effects to New Zealand agriculture from the US drought and tight food supplies globally.

Beef and sheep farmers had the lowest levels of confidence of all farmers. Dairy farmer sentiment lifted slightly from the mid-winter doldrums of the previous survey, said Russell.

Kiwifruit growers were increasingly concerned in the quarter about the impact of the disease Psa-V. Horticulture sector confidence generally declined again with 43 per cent of growers expecting their business performance to worsen.

- © Fairfax NZ News