Farmer optimism levels have dropped for the first time in two years.
Farmers' optimism levels have dropped. Photo: 123rf
The survey of over 1000 farmers found that optimism dropped by 23 points compared to July last year, and for the year ahead it fell by 50 points.
Federated Farmers Vice-President Andrew Hoggard said it was quite a hit but needed to be put into context.
"Pretty much all recent surveys of businesses have found a drop in confidence because of the disruption and uncertainty over October's general election.
"In mid-January, when our survey was done, farmers in many regions had endured weeks and weeks of little or no rain," he said.
Driving factors behind the decrease in optimism were negative perceptions of the economy, farm profitability, farm production and farm spending.
Farm debt levels had also increased and fewer farms were now debt-free, Mr Hoggard said.
Dairy farmers were the most pessimistic, with production expected to drop and only about half of farms making a profit.
The survey shows similar concerns to six months ago, around regulation and compliance costs and farmers are also struggling to find workers.