New Zealand farmer confidence hits five-year high - survey

WELLINGTON Tue Nov 5, 2013 11:14pm EST

WELLINGTON Nov 6 (Reuters) - New Zealand's farmers were the most confident in five years in September, bolstered by the prospect of a record payout by dairy giant Fonterra and improving prices for other commodities, a survey said on Wednesday.

The Rabobank survey said a net 48 percent of respondents were optimistic about the general outlook for the farming sector over the coming year, compared with a net 46 percent in the June survey.

More farmers were optimistic about their own business outlook as well, at a net 52 percent level against 45 percent in the previous quarter.

Rabobank said a combination of weather and markets was behind the lift in sentiment.

"The current favourable climatic conditions, combined with improving product returns across most agricultural sectors, have increased confidence even further this year," said Rabobank New Zealand chief executive Bruce Russell.

Agricultural produce accounts for about half of New Zealand's NZ$46 billion ($38.6 billion) annual export earnings.

The sector was badly hit by a severe drought at the beginning of the year, which sharply reduced milk production and led to the early slaughter of animals.

Dairy farmers remain the most optimistic, buoyed by the forecast of a record payout by the New Zealand based Fonterra Co-op.

However, Russell cautioned that it is likely that current high global dairy prices will not be sustained next year.

Sheep and beef farmers were also more positive with higher prices being reported at the start of the processing season.

The survey of 450 farmers also showed a slight increase in investment intentions, and a rise in the number who regarded their farm as financially secure. ($1=NZ$1.1930)

(Reporting by Gyles Beckford; Editing by Kim Coghill)

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