A Rabobank survey found last month farmer confidence in the broader agricultural economy, dropped to negative 72 percent.
It's the lowest reading in the 20-year history of the survey.
It comes as Beef and Lamb New Zealand predicts sheep and beef farm profit margins to fall a further 30 percent this season.
Rabobank's Bruce Weir says the survey was conducted just after Fonterra announced a drop it's Farmgate milk price.
He says since then Fonterra has increased the price by 50 cents which has been received well.
