The survey shows the net confidence reading rose 20 points to -58 percent from -71 per cent in the previous survey.

Five percent of those surveyed expected conditions in the agricultural economy to improve in the next year, up from 4 percent the previous quarter.

Those expecting conditions to worsen fell to 63 percent, down from 75 percent.

Rabobank chief executive Todd Charteris said while confidence was still very low, it was pleasing to see it heading in the right direction.

The increase in positive sentiment was being led by sheep farmers, beef farmers and the horticulture sector.

“The catalyst for this improved sentiment among sheep and beef farmers has been improved demand for New Zealand’s red meat exports from the Chinese market following the abandonment of China’s zero-Covid policy late last year and subsequent reopening of their food service sector,” Charteris said.

“This has played a key role in the recent improvement in schedule prices for both beef and lamb, which have now bounced back after a dip late last year.

“For growers, while we’ve seen the inclement weather disrupt production in several regions over recent months, we’ve also seen demand for fruit and vegetables in both domestic and international markets remain strong, and this has helped to hold up prices.”

On the other hand, dairy farmers were now even more pessimistic about the broader agri-economy than they were last quarter due to falling demand for dairy products and an expected lower pay-out for this season.