Get prepared for a ‘Now Normal’ future, says Ian Proudfoot – Global Head of Agribusiness for KPMG – discussing the likely effects of COVID-19 in the months to come.
The declining confidence comes as the country’s primary industries prepare to shoulder some of the heavy lifting for economic and social recovery, claims specialist rural bank Rabobank.
New Zealand chief executive Todd Charteris says the bank’s latest rural confidence survey shines a light on the psyche of farmers at a critical time for the nation.
“The food and agri sectors will be crucial in helping to rebuild the New Zealand economy and Rabobank continues to have a strong positive long-term view of the sector outlook,” he says.
“Having said that, our latest survey shows farmer sentiment has slipped since late 2019.”
After climbing strongly in the December 2019 quarter, net farmer confidence in the broader agricultural economy fell to -44% in the March quarter – down from -12 per cent previously.
The survey found a decrease in the number of farmers expecting agricultural economic conditions to improve in the coming 12 months (down to 12% from 21% last quarter). There were also more farmers expecting conditions to worsen (56% from 33% previously).
The number of farmers expecting the performance of the agricultural economy to stay the same fell to 29% from 44% last quarter. Among farmers with a negative outlook, the majority cited COVID-19 as a key factor for holding this view.
Charteris says during the period the survey was open – between March 3 and 18 – farmer concerns are likely to have been centred largely on the impact COVID-19 was having on Chinese demand for New Zealand agricultural products and the potential for the virus to result in similar demand falls in other global markets.
“Understandably this had a marked impact on farmer confidence – particularly in sheep and beef due to uncertainty over market access.”