Source: Federated Farmers
Strong returns and lower debt-servicing costs mean more farmers than ever are making a profit, according to the latest Federated Farmers Confidence Survey.
Of nearly 650 farmers who responded to the survey in late January and early February, 70% said their farm was currently profitable.
“That’s the highest level since we started our twice-yearly Farm Confidence Survey back in 2009,” Federated Farmers president Wayne Langford says.
“It’s great to see farmers doing well after several tough years of rising costs and uncertainty. When farmers are profitable, that’s good news for the rest of New Zealand.
“That money flows into rural communities and the wider economy, supporting local businesses, creating jobs and strengthening regional New Zealand.”
The mid-season survey shows farmers are feeling the most confident about current economic conditions since 2017, with a net 37% positive score.
“That’s a big turnaround from 2023/24, when farmer confidence was stuck at rock bottom and looked like it was just going to keep falling,” Langford says.
“Improved commodity prices are the key driver, as well as lower lending interest rates.
“At the same time, Federated Farmers has been working incredibly hard to cut some of the red tape that was holding our sector back, and we’ve had a Government that’s listened to our concerns.
“That easing of regulation has really helped breathe new life back into rural New Zealand again.”
The recovery from 2023/24 is now firmly established across most sectors, with the number of profitable dairy farms stable at 81%, and meat and wool farms improving substantially.
“Arable farm profitability continues to lag at 41%, but that’s a small improvement from our July 2025 survey.
“It’s been an incredibly challenge year and harvest for our arable farmers across the country” Langford says.
Despite favourable current conditions for farmers, the survey shows many are feeling apprehensive about the future, with concerns about cost pressures and market volatility.
When asked about their expectations for after-tax profit over the next 12 months, farmers’ optimism has dropped sharply, with more now predicting a fall in profits than an increase.
This marks the first negative profitability outlook since early 2024.
“Dairy farmers were particularly pessimistic,” Langford says.
“With forecast payouts hovering around $8.50-$9.50 per kilogram of milk solids, but rising input costs pushing the break-even margin to $8.50, there’s quite a bit of nervousness there.
“Farmers might be receiving strong milk cheques, but it’s the margin that matters. If costs keep rising, that will quickly eat away at profitability.”
Forward sentiment on economic conditions slipped to a net positive 4%, down from 6% six months ago.
A particularly worrying result is the finding that more farmers are having difficulty recruiting skilled and motivated staff.
Langford says it’s incredibly frustrating for farmers because, even as nationwide unemployment rises, they struggle to find good staff.
“It’s a message we keep sending to successive governments,” he says.
“The primary industries are the engine room of the economy, but it’s hard to attract willing workers to more remote provincial areas.
“Farmers play a role in training and looking after their staff, but many challenges are beyond their control.
“When rural communications, roads, bridges, and school bus services are under-invested in, younger workers and families stay in the cities – sometimes even if that means relying on a benefit,” Langford says.
When asked in the survey about their greatest concerns, farmers said regulation and compliance costs are still the main worry, but input costs have risen back to second place.
“While inflation has eased across the broader economy, on-farm expenses for essentials such as electricity and feed remain high.
“That’s continuing to put pressure on farmers’ cashflow and profitability.
“Worries about farmgate and commodity prices jumped sharply to third place.”
Asked what the priorities should be for the Government in election year, fiscal policy was number one on farmers’ lists.
“Clearly, farmers are concerned about government spending, taxation and debt levels,” Langford says.
“They also want the Government to prioritise the economy and business environment.”
Local government reform was fourth on the priority list, up from eighth just a year ago.
“There’s continued dissatisfaction with rates hikes, spending priorities and service delivery in rural areas,” Langford says.
“Hopefully the Government’s proposals for a rates cap, and for reducing the number of councils to eliminate duplication and improve efficiency, will see these concerns diminish in future.
Langford says the best move the Government could make to turbocharge confidence and investment in agriculture would be to pick up Federated Farmers’ ideas for improvements to the new legislation that will replace the Resource Management Act.
“That bloated Act, and the costly and time-consuming resource consents and hearings it entails, has been a thorn in the side of our productive sector for far too many years.”
LiveNews: https://livenews.co.nz/2026/03/05/rural-news-profitability-at-all-time-high-but-farmers-cautious-federated-farmers/