Economic optimism among farmers is at a record high, according to the latest Federated Farmer's Farm Confidence Survey.

The July survey found 65 percent of farmers surveyed felt confident about farm profitability - a 12-point boost from January - the highest result recorded in the survey.

The six-monthly survey also found farmers' perceptions of current economic conditions had reached an eight-year high, with 33 percent believing economic conditions were good - a significant jump from a record low of - 66 percent a year ago.

Federated Farmers president Wayne Langford put the upbeat mood down to strong dairy and meat prices, lower interest rates, and cuts to government regulations.

Langford said it was a "good result" all round.

"It's a really, really positive result for farmers, but also a really, really positive result for New Zealand. When New Zealand farmers are doing well, New Zealand is doing well."

Bouyed by high milk prices, 80 percent of dairy farmers had reported making a profit, with sheep and beef farmers at 44 percent and arable lagging behind, with 11 percent reporting a profit amid lower crop values.

Langford said he was aware some arable farmers were struggling.

"We will be looking to see what we can do to improve the arable sector. But across the board, a rise in dairy prices, a rise in red meat prices had really helped with the profitability of those businesses."

Federated Farmers president Wayne Langford. Photo: RNZ/Marika Khabazi

Farms throughout the country were recording profitability, the survey said, with Otago-Southland farms leading the pack at 72 percent, followed by the East Coast of the North Island at 69 percent and Taranaki-Manawatu at 66 percent.

The results also showed rural mental health had improved in 2025, moving from a net 52 percent negative in January 2023, to net 26 percent positive in July 2025.

The biggest concerns farmers reported in the survey were regulation and compliance costs, followed by climate change policy, the emissions trading scheme, and local government rates.

The survey was completed prior to the Tasman floods, and Langford said while farmers in Nelson-Tasman had experienced challenges recently, he remained optimistic there was long-term confidence in the sector.

"Farmers will know that they are in it for the long game, and when they are looking at this survey and saying hey do we have confidence in our businesses - in farming in general into the future - no doubt they will be looking at it with confidence to carry on."

'Lots of reasons to be optimistic'

ANZ agricultural economist Matt Dilly said conditions had improved markedly on a year ago.

"Lamb prices are up 50 percent, beef prices are up around 30 percent, and it's easy to forget, with how good thing's have been over the past year, but Fonterra's opening farmgate milk price at this time last year was $8 and now we're looking at $10.

"So these are really big increases that farmers are seeing right now."

The survey found only 6 percent of farmers expect economic conditions to improve over the next 12 months, a decrease from 23 per cent in January.

Dilly said there was more positive momentum for sheep and beef prices to remain high amid a global shortage of red meat causing high demand.

"Dairy there's a lot of reasons to be optimistic there, but there's a bit more potential for global production to swing in a direction that starts to impact the price."

While global grain prices were low right now, Dilly said there was potential for something to turn the outlook around. - RNZ