July 14, 2009

New Zealand farmer confidence fell for the third consecutive time since November as the currency surged and dairy prices slumped, Rabobank Groep NV said.

Out of 450 farmers surveyed last month, 49 percent of them expect the rural economy will deteriorate over the next year, Rabobank's New Zealand unit said. The number of pessimists rose from 33 percent in April and 29 percent in November.

New Zealand's dollar has surged 14 percent against the US currency in the past six months, curbing exports of beef and wool.

World prices for butter, cheese and milk powder fell 49 percent in June from a year earlier, according to ANZ National Bank Ltd's monthly index.

Just 12 percent of farmers expect conditions will improve, compared with from 27 percent in the April survey.

Dairy farmers were the most pessimistic with 57 percent expecting the rural economy to worsen, Rabobank said.

In May, Fonterra Cooperative Group Ltd, the world's largest dairy exporter, said it may pay its New Zealand suppliers 12-percent less due to weak prices.

More than a third of all farmers said profits will decline this year and 26 percent expect to invest less on their properties over the next 12 months.