Despite lingering COVID-19 worries, there's been a rebound in farmer confidence, according to Rabobank's latest quarterly rural confidence survey.
While overall confidence remains deep in negative territory, the survey showed it was now sitting at -26 percent this quarter, up from -44 percent in the previous survey.
COVID-19 was cited as a key concern by 38 percent of farmers with a pessimistic outlook for the agricultural economy this survey, well back on the 84 percent in mid-March when the pandemic was taking hold across the globe.
Rabobank New Zealand's chief executive, Todd Charteris, said the uplift in overall farmer confidence reflected positively on the industry's response to the significant challenges faced in recent months.
"Over recent months, we've seen the sector adjust quickly to the restrictions in place at various COVID-19 alert levels and this has enabled the country's agricultural products to be processed at close-to-full capacity. We've also seen exporters acting swiftly to divert products into different markets and channels when demand has waned in others.
"This strong industry response has helped to mitigate some of the negative impacts of the virus and has played a key role in lifting farmer confidence from the near-record low we saw in March," he said.
The survey found farmers' investment intentions were up slightly on last quarter, but remained in net negative territory overall at -4 percent.
Charteris said farmers were still taking a cautious approach to spending, because of the ongoing uncertainty caused by COVID-19.
"When you look at some of the commodity forecast, for example, Fonterra have come out with a wide range in milk price, which highlights the uncertainty and therefore potential volatility in pricing.... farmers are doing the right thing and taking a cautious approach into the next 12 months."
Conducted since 2003, the Rabobank Rural Confidence Survey is administered by independent research agency TNS, interviewing a panel of approximately 450 farmers.