Growers drive optimism

10 Apr 2017

By Sue Grant-Mackie

Growers, keen to feed into new export markets, are fuelling a renewed optimism in agriculture.

Rabobank says 2017 has begun on a positive note for the country’s farmers, with rural confidence levels edging up, primarily driven by signs of renewed optimism among horticulture and beef and sheep producers.

Rabobank New Zealand general manager for country banking Hayley Moynihan said horticulture producers and sheep and beef farmers had shown signs of increasing optimism about the agricultural economy. The overall net confidence reading in the horticulture sector climbed from +26% to +39%, while among the sheep and beef sector, confidence moved out of negative territory, from -5% to +9%.

“There has been cause of optimism across these sectors recently,” she said. “Horticulture had an exceptional year of production and export growth in 2016, and a similar performance is expected in 2017.”

Horticulture producers were increasingly optimistic in their expectations about business performance with the net measure climbing from +19% last survey to +44%. “Rising demand from Asian markets continues to be a key source of growth for horticulture exports – and this demand is being met by large harvests of gold kiwifruit coming online and a record crop expected from apple growers this year,” Ms Moynihan said.

Farmer investment intentions increased further this quarter, and are at the highest level since the end of 2014. The number of farmers expecting to invest more in their businesses in the next 12 months rose to 31% (up from 28%), while those intending to reduce investment declined to just 7%.

Expansion plans in horticulture are seeing this sector, in particular, lead the investment charge, Ms Moynihan said.

“On the back of strong business optimism, planting and re-planting of new orchards is taking place in principal horticulture sectors with the aim of feeding into new export markets,” she said.

 

Sue Grant-Mackie is editor of both NZGrower and The Orchardist.

This article first appeared in the April 2017 issues of NZGrower and The Orchardist. For more information or to subscribe, click here.