The June Rabobank Rural Confidence survey found farmer confidence has improved with worries about commodity prices and input costs easing, while interest rates and a dry start to the year remain concerning. Dairy farmers’ confidence lifted from -22% to -15% on average, despite the prospect of lower milk prices in the 2023/24 season.

Nationally, farmer confidence lifted from -25% in Q1 2023 to -22% in Q2. While half the farmers surveyed are not expecting changes to the ag economy’s performance over the next 12 months, respondents expecting conditions to improve lifted from 11% in Q1 to 13% in the latest survey. There was also a dip in farmers who expect conditions to worsen down from 36% to 35%. Less farmers are worried about falling commodity prices or input costs, while the survey noted a lift in the number of farmers concerned with government intervention/policies.

Concerns around interest rates remained stable with 21% of farmers citing concerns around rising interest rates, compared to 20% in the previous survey. More farmers (16%) expect to increase their total farm debt over the next 12 months with new loans funding on-farm capital expenditure for 46% of farmers (up from 38% in Q1) and working capital for 26% of farmers, up from 22% in previous survey. Fewer farmers plan to borrow money to buy property down from 34% to 17% in the latest survey, with grain, sheep and dairy farmers indicating the strongest intention to use new borrowings to fund property purchases.