Farmer satisfaction levels with their banks are continuing on a downwards trajectory, Federated Farmers' latest banking survey has found.
The six monthly survey of more than 1100 farmers found 62 percent were satisfied with their bank, down four points from January 2021.
Federated Farmers said that followed a downward trend over the past five years which had seen satisfaction fall from 80 percent.
Meanwhile, Federated Farmers president Andrew Hoggard said the number of farmers who reported they'd been feeling under pressure from their banks stayed stable at 18 percent.
"Arable farmers are feeling the most pressure, when in earlier surveys of late it has been dairy farmers," Hoggard said.
The survey showed 71 percent were concerned about local branch closures. Of those, 42 percent said they needed branches to carry out their business and 56 percent were worried about the impact of closures on rural communities.
Hoggard said provincial towns were facing many pressures, including labour shortages and the loss of productive farmland to forestry conversions.
"Bank branch closures are just another hit on confidence, making doing business in rural areas that much harder, and another reason for young people to look to cities for their future when agriculture is the main way New Zealand earns its living in the world."
Other findings from the Federated Farmers survey:
- 24 percent of farmers said their lending conditions had changed over the past six months, down three points on November. Of those with changed conditions, 14 percent were tougher and 10 percent easier.
- Average mortgage interest rate was 3.8 percent, down from 3.9 percent in November. 91 percent are paying mortgage interest rates of less than 5 percent.
- Average overdraft interest rate was 6.3 percent, down from 6.4 percent in November. 20 percent are paying overdraft interest rates of less than 5 percent.
- 79 percent of farmers have a mortgage with an average value of $4.3 million and median value of $2.2 million. Arable farms had the biggest average and median mortgages, even bigger than dairy farms.
- 78 percent of farmers have an overdraft with an average value of $193,000 and median value of $100,000. Arable farms also had the biggest average and median mortgages.