Farmer confidence in Southland has surged to its highest level in over a decade, rebounding from record lows in recent years, according to Federated Farmers’ latest Farm Confidence Survey.

The report highlights that falling interest rates, rising incomes, and more favourable farming rules have significantly contributed to this positive shift.

Federated Farmers president Wayne Langford noted a significant change in the mood of rural New Zealand.

"Farmers are feeling a lot more positive," he said.

"The last few years have been bloody tough for many of our farming families, with falling incomes, rising interest rates, and unpaid bills piling up on the kitchen bench."

Langford emphasized the challenges of an incredibly tough regulatory environment and impractical farming rules.

"These survey results paint a clear picture of a sector finally able to breathe a sigh of relief as some of that weight is lifted," he added.

The January survey shows a remarkable improvement in farmers’ confidence in current general economic conditions, surging from a deeply negative -66% in July 2024 to a net positive score of 2%.

This marks the largest one-off improvement since the question was introduced in 2016. Additionally, a net 23% of farmers now expect better economic conditions over the next year, the highest confidence level since January 2014.

Profitability has also seen a sharp increase, with 54% of farmers now reporting making a profit, double the number from the last survey six months ago.

Despite this positive trend, Langford cautioned that confidence is still only just in the positive.

"It’s been a remarkable recovery in farmer confidence over a short period, but we were coming off an extremely low base. We’ve come a long way, but there’s a long way to go yet."

The survey results indicate that regulation and compliance costs remain the greatest concern for farmers, followed by interest rates, banks, and input costs.

Langford emphasized the impact of government rules and regulations on farmers’ costs and confidence. "Those compliance costs can make or break your season and significantly impact a farmer’s confidence to keep investing in their business."

Interest rates and banking issues have consistently been top concerns for farmers, prompting Federated Farmers to advocate for a banking inquiry.

"Interest payments are a huge cost for most farming businesses, and farmers have been under massive pressure from their banks in recent years," Langford said.

The survey shows that farmers’ highest priorities for the Government are the economy and business environment, fiscal policy, and reducing regulatory burdens.

"For farmers to have the confidence to invest in our businesses, employ more staff, and grow our economy, we need to have confidence in our direction of travel as a nation too," Langford concluded.

The report’s key findings include significant improvements in general economic conditions, farm profitability, and spending intentions, reflecting a sector on the path to recovery.