Farmer confidence has risen to its highest level since late 2019, according to Rabobank's latest quarterly rural confidence survey.
However, the survey shows that sentiment still remains at negative levels overall, with net farmer confidence sitting at minus 23 percent up from the minus 32 percent recorded in the last quarter.
Rabobank New Zealand's chief executive Todd Charteris said confidence was up among the pastoral sector with dairy, sheep and beef farmers citing improved demand and overseas markets as the key reasons for a positive outlook.
"Demand for New Zealand dairy products has held up well since the last survey in September and GDT event results have trended upwards over recent months.
"As a result, we saw Fonterra lift the mid-point of their farmgate milk price range by 40 cents to $6.80 kg/MS in October and this will have boosted spirits among dairy industry participants," Charteris said.
Sheep and beef farmer confidence also inched higher in this survey from the historically low levels recorded in September. This had been driven by generally solid demand for New Zealand red meat products in key markets like China and the US, he said.
While sentiment was up this quarter, Charteris said overall confidence among pastoral farmers remained mired in negative territory amid concerns over government policy and Covid-19.
"Government policy and Covid-19 remain the most significant concerns for New Zealand's pastoral farmers with these factors cited as a source of apprehension by more than half of dairy, sheep and beef farmers holding a pessimistic outlook for the year ahead."
The survey found horticulturalists continue to be the most optimistic of all the sector groups about the outlook for New Zealand's broader agricultural economy, however, growers are now less positive than last quarter.
"This is likely to reflect that while the industry faces some short-term challenges, horticulturalists are positive about the longer-term outlook for the sector and, as a result, are prepared to continue investing in their operations," Charteris said.
Conducted since 2003, the Rabobank Rural Confidence Survey is administered by independent research agency TNS, interviewing a panel of approximately 450 farmers each quarter.