Economic Optimism Among Farmers Reaches Record High

Farmer confidence in New Zealand has hit an eight-year high, with a significant increase in optimism about current economic conditions, according to the latest Federated Farmers’ Farm Confidence Survey. The July survey revealed that 65% of farmers surveyed felt confident about farm profitability, a notable 12-point increase from January and the highest level recorded in the survey’s history.

The survey also found that 33% of farmers believe that current economic conditions are good, a marked improvement from a record low of 66% last year. Federated Farmers president Wayne Langford credited this positive outlook to strong dairy and meat prices, lower interest rates, and recent cuts to government regulations.

"It's a really, really positive result for farmers, but also a really, really positive result for New Zealand. When New Zealand farmers are doing well, New Zealand is doing well," Langford said.

With high milk prices, 80% of dairy farmers reported making a profit, while sheep and beef farmers saw a 44% profit rate. Arable farming, however, lagged behind, with only 11% reporting a profit amid lower crop values. Langford acknowledged the challenges faced by arable farmers and said the organization is exploring ways to improve the sector.

Regional performance also showed promise, with Otago-Southland leading at 72% profitability, followed by the East Coast of the North Island at 69% and Taranaki-Manawatu at 66%. The survey also indicated an improvement in rural mental health, with the net sentiment shifting from 52% negative in January 2023 to 26% positive in July 2025.

Despite these positives, the biggest concerns reported by farmers remained regulation and compliance costs, followed by climate change policies, the emissions trading scheme, and local government rates. The survey was completed before the recent Tasman floods, but Langford expressed confidence in the long-term resilience of the sector.

ANZ agricultural economist Matt Dilly noted that conditions have improved significantly compared to a year ago, with lamb prices up 50% and beef prices up around 30%. Fonterra's farmgate milk price has also risen from $8 to $10. However, Dilly warned that while there are reasons to be optimistic in the dairy sector, global production fluctuations could impact prices.

Despite the overall optimism, only 6% of farmers expect economic conditions to improve in the next year, down from 23% in January. Dilly noted that while global grain prices remain low, there is potential for future changes that could turn the outlook around.

As the sector continues to adapt, farmers remain focused on long-term sustainability and profitability, with the survey indicating a strong foundation for future growth and resilience.