Dollar worries still feature in farmers' outlook 

Source: ONE NewsDairy cows

Farmer confidence has improved for the first time in a year, a survey shows.

Dairy farmers are back to being most optimistic, despite the Rabobank September rural confidence survey being taken before before prices rose 25% at Fonterra's most recent online milkpowder auction and a 12% increase in payout projection.

The survey of 1000 farmers, conducted last month, found 22% expected the rural economy to improve in the next 12 months, up from 12 percent three months ago.

And while 25% still expected conditions to worsen, this was a big drop on the 49% with that view in the previous survey.

Rabobank general manager Rural New Zealand Ben Russell said there had been a good start to spring growing conditions across most of the country, but factors such as the high New Zealand dollar, volatile commodity prices and concerns about the global economy still constrained farmer sentiment.

Of those farmers who expected conditions to worsen, the exchange rate was the biggest concern (cited by 57%), while uncertainty over commodity prices was nominated by 30% and overseas markets/economies by 29%.

Commodity prices had risen in international markets but the farmgate prices for dairy, beef and lamb had been virtually unchanged as the New Zealand dollar had also increased.

Beef, lamb and venison prices were usually at their seasonal peak now but had been very flat or easing, Russell said.

Despite this, sheep and beef farmer sentiment had also improved, with 21% expecting economic conditions to improve, up from 13% in the previous survey.