RTTNews - Monday, results of a survey showed that confidence among New Zealand's farmers declined for the third consecutive time due to a stronger currency and falling commodity prices.

The latest Rabobank Rural Confidence Survey showed that 49% of New Zealand farmers now expect the rural economy to deteriorate in the coming 12 moths, rising from 33% in the previous survey.

The survey was carried out by research agency TNS Conversa among 450 farmers a month ago.

Just 12% expect the rural economic situation to improve, much smaller than the 27% previously.

The survey showed that dairy farmers continued to hold the lowest confidence levels, though biggest declines in confidence was recorded among sheep and beef producers. Fifty seven percent of dairy framers expect the agricultural economy to worsen, higher than the 45% in the previous survey. Among sheep and beef farmers, 44% reported a pessimistic outlook, surging from 23% previously.

Regarding the pessimistic sentiment among dairy farmers, Rabobank general manager Ben Russell said, This change had followed Fonterra's announcement that the forecast milk payout for the 2009/10 season would be 12% lower than the previous season and would remain susceptible to further strengthening of the currency. The NZ dollar has appreciated to around US 63 cents from US 55 cents at the time of the previous survey.

Further, the survey revealed that farmers were aiming to consolidate or lower debt levels to ride out the tough economic times and position themselves for better times ahead.

A further contributing factor to lower confidence is likely to be a softer rural property market, Russell said, with both land sale prices and farm turnover falling during 2009.

Elsewhere on Monday, a report from the Real Estate Institute of New Zealand showed that there was a significant drop in the number of rural properties sold in the three months ended June. Prices mirrored those seen in the three months ended June of 2007.

Farmers' investment intentions have also taken a hit, the Rabobank survey showed. The proportion expecting to reduce their total farm business investment rose to 26% from 21%. Just 16% of farmers plan to increase their investment, down from 22% in the previous survey.

For comments and feedback: contact editorial@rttnews.com