The mood amongst farmers has lifted dramatically, with the latest Federated Farmers survey finding confidence is at a 10-year high.

The latest Farm Confidence Survey from January, found farmers' confidence in current general economic conditions has surged from a deeply negative - 66 percent in July last year] to a positive score of 2 percent.

It marks the largest one-off improvement since the question was introduced in 2016.

Federated Farmers president Wayne Langford said the last few years had been "bloody tough" and it was "fantastic" to hear that farmers are feeling more positive.

He said it had likely been driven by falling interest rates, rising incomes and "more favourable" farming rules.

"We've seen the government make significant efforts to look at what's been holding farming back. You know the removal of the idea of emissions pricing, the removal of expensive and unworkable farm plans and getting on-farm inflation under control.

"These sorts of things give farmers confidence that they can invest in their business, they can invest in their staff and on their farm."

Langford said the mood has lifted across the primary sector, with good dairy payouts and beef prices, and improving sheep and wool prices.

"I've definitely noticed a significant shift in the mood of rural New Zealand.

"These survey results paint a clear picture of a sector finally able to breathe a sigh of relief as some of that weight is lifted."

'More farmers think they'll make a profit'

The survey also found there had been a sharp lift in profitability, with 54 percent of farmers now reporting they were making a profit - double the number in the last survey six months ago.

Langford said it was great to see farmers being able to cash in on the way the markets are beginning to respond.

"That is really good result because there's nothing worse than doing this job for free or potentially making a loss."

Farmers being more confident about future profitability has also seen a lift in farm production expectations, as well as increased plans for spending and reducing debt.

The survey found just under a quarter of farmers planned to increase spending over the next 12 months, and more than 40 percent planned to reduce their debts.

Federated Farmers president Wayne Langford. Photo: RNZ/Carol Stiles

Langford said this was being driven by lower interest rates, improved confidence, and stronger production forecasts.

More farmers spending was good for rural communities and the country, he said.

"Ultimately there will be more money in the bank and that will see more money being spent in rural communities, more rural debt being paid off and ultimately a great result for the New Zealand economy."

Langford said it was important to note that, despite confidence being at its highest point in more than a decade, it was still only just in the positive and there were other ongoing concerns.

The top issues farmers were worried about include regulation and compliance costs, followed by interest rates and banks, and input costs.

"Interest payments are a huge cost for most farming businesses and farmers have been under massive pressure from their banks in recent years.

"We want to see the Government take a much closer look at our banking system and whether farmers are getting a fair deal from their lenders."

The survey found farmers' highest priorities for the Government are the economy and business environment, fiscal policy, and reducing regulatory burdens.

"If the Government are serious about their ambitious growth agenda and doubling exports over the next decade, this is where they need to be focusing their energy," Langford said. - RNZ