Farmer confidence has take another turn for the worse, a new survey has found.

In January farmer confidence was at the lowest level recorded in biannual surveys conducted by Federated Farmers, but last months survey found it has dropped even further.

Of the 1200 farmers surveyed in July, net 47.8 percent of them considered current economic conditions to be bad, down 55.6 points from January when a net 7.8 percent considered conditions to be good.

Federated Farmers president Andrew Hoggard said it was a huge drop in six months.

"Obviously inflation and supply chain disruption fallout from Covid and Russia's invasion of Ukraine are part of it, but continued concern over the pace and direction of government reform and regulation, not to mention staff shortages, are also contributing to uncertainty and gloom."

"Farmers identified their top concerns as: Climate Change Policy & ETS; Regulation & Compliance Costs; Input Costs; and Debt, Interest, Banks.

"And with raised awareness of Foot and Mouth Disease in Indonesia and Malaysia, biosecurity has rocketed up the list of top concerns that farmers want the government to confront."

A net 80.9 percent of respondents expected general economic conditions to worsen over the next 12 months, up 16.9 points on the January survey.

"That's not inconsistent with the results from other business confidence surveys," Andrew said.

The survey showed despite the slide in confidence, farmers' profitability expectations hadn't taken as big a hit as might have been indicated.

A net 55 percent of respondents said they were currently making a profit - six points down on the January survey.

Looking out over the next 12 months, a net 53.1 percent of respondents expected their profitability to decline, up 11.9 points on the January 2022 survey when a net 41.2 percent expected it to decline.

This is perhaps to be expected, given the squeeze from higher input costs and high commodity prices retreating, Andrew said.

Hoggard said the survey indicated a slight easing in the labour market, "but it's still very tight".

A net 44.3 percent of respondents reported it has been harder to recruit skilled and motivated staff over the past six months, down 4.3 points on the January survey.

Republished by Arrangement