Southland farmers breathe a sigh of relief
Southland Farmers will be breathing a sigh of relief that central Government is stepping in to stop Environment Southland from introducing unworkable and expensive new farming rules.
Of responses from approximately 1,000 farmers from across the country, 7.8% considered current economic conditions to be good, a 10.1% decline from the July 2021 Federated Farmers Farm Confidence Survey, when 17.9% considered conditions to be good.
A net 64% of farmers surveyed believed general economic conditions would worsen over the next 12 months, a 25-point downturn from the 39% in the July survey.
Sentiment about general economic conditions is at the lowest level since Federated Farmers began the half-yearly survey in July 2009, surpassing the previous low from July 2020.
"The results are even more disturbing when you consider farmers were answering the survey before the surge of Omicron cases in New Zealand and Russia’s invasion of Ukraine, both of which will weigh on economic growth," says Federated Farmers President and economics spokesperson Andrew Hoggard.
With a net 61.1% of farmers reported making a profit, a 5.5-point increase on July 2021, a net 11.2% expected their profitability would decline in the year ahead, 16 points down on six months earlier when a net 4.4% expected profitability would improve.
"We’re getting strong returns on meat and dairy right now thanks to high global demand and food security concerns but clearly farmers are seeing a lot of that revenue going right back out again with higher fuel and fertilizer prices, rising labour costs, and the hot inflation that is affecting every other New Zealander," Hoggard says.
The survey shows a net 52.7% of respondents expected their spending to increase over the next 12 months, up from 32.6% six months ago.
A net 1.8% of respondents expected their production to increase over the year ahead, a 13.4-point drop from July 2021 when a net 15.3% expected it to increase.
"This finding is another substantial drop and it was before February’s heavy and unseasonable rain, which caused a lot of damage and loss for many arable farmers," Hoggard says.
Last year’s survey pinpointed the sector’s struggle to fill workforce gaps as a huge issue, with nearly half of respondents stating it was harder to recruit skilled and motivated staff. January’s result shows negligible improvement, with just a 0.2-point decrease on that finding.
"We should all be pleased unemployment levels are so low in New Zealand given assaults on our economy from all sides, but this dire farm recruitment situation underlines why Federated Farmers continues to advocate to government for additional workers - especially in dairy - to cross our borders."
Asked to list their greatest concerns, those farmers who completed the January survey chose climate change policy and ETS (18.7% of respondents), followed by regulation and compliance costs (13.1%), and freshwater policy (9.5%). This result is unchanged from the July 2021 survey.
"I suspect the global economy will be right up there if the survey were done right now," Hoggard says.
The three highest priorities respondent farmers wanted the Government to address were the economy and business environment (15.0%), fiscal policy (12.1%) and regulation and compliance costs (11.7%). This compares to the July 2021 survey when the top three priorities were regulation and compliance costs (14.0%), economy and business environment (13.1%), and supporting agriculture and exporters (10.4%).
