New Zealand farmers face profit highs but warn of rising costs and election uncertainty

The latest Federated Farmers confidence survey, covering 634 New Zealand farms, revealed that profit levels have reached a decade high, with 78% of meat and wool farms and 74% of dairy farms reporting gains. In contrast, arable farms are under pressure, as nearly 25% are posting losses and report declining wellbeing. Rising expenses for feed, fertiliser, fuel, insurance and compliance are identified as the top concern, and farmers expect these to erode next year’s returns, especially for dairy operations.

The survey also highlighted political anxiety ahead of the November general election and uncertainty over future resource-management reforms. While most farms plan to increase on-farm spending, about 40% intend to reduce debt, though arable producers are more likely to borrow further. The Reserve Bank’s recent rate hike, a cut to Fonterra’s milk price forecast, and a two-year-high inflation rate of 4.1% frame the broader economic backdrop.