Agribusiness sector insights

BDO Business Wellbeing Index

A boost in business performance, but wellbeing takes a hit

The agribusiness sector has experienced considerable hardship in recent years, with adverse weather events, hard-hit supply chains, and fluctuating commodity prices creating challenges for many. However, our 2024 BDO Business Wellbeing Index shows that agribusiness leaders are feeling more positive about their current and future business performance than they were in October 2023.

View journalist Paddy Gower's conversation with Rod Hansen, BDO Agribusiness Partner, plus insights from Quartz Hill Station owner Dan Harper.

Our March 2024 survey shows a record high number of agribusiness leaders feeling positive about their business performance in the last two weeks (all or most of the time). At 67%, this is an 11% increase on our October 2023 survey, showing a sizeable jump up in performance. This confidence is reflected in future business performance sentiment, where 77% of agribusiness leaders expect to feel positive about business performance in six months’ time.  

This positive sentiment may be in part due to the dairy sector’s turnaround from the stark conditions it faced last year. Improved global dairy prices and Fonterra’s elevated payout forecast are contributing to a more positive outlook for many in this space. Our survey also shows agribusiness leaders are feeling positive about the performance of their systems and technology, progress in meeting tax compliance and commitments, and their climate risk management profile.  

On the downside, agribusiness leaders are least positive about external economic factors, political factors, and supply chains. These pressures will be familiar to many in the sector, with New Zealand's high official cash rate having a significant impact on business profitability across the board, and political situations overseas impacting supply chains and leading to inflationary pressures. 

Financial concerns drive negative wellbeing for agribusiness leaders

Looking to wellbeing, agribusiness leaders scored 63 out of 100 on the WHO-5 Index - the World Health Organisation’s internationally recognised wellbeing measure. This has decreased from 74 in October 2023 and is a worrying sign that agribusiness leaders may be overworking themselves at the expense of their wellbeing. 

Expectations around agribusiness leaders’ future wellbeing have dropped to their lowest ever levels, with just 56% expecting to feel satisfied with life all or most of the time in six months. This is down from 69% in October 2023. 

Business financial concerns are the leading driver of negative wellbeing in agribusiness lives, which is unsurprising given the well-documented financial hardships the industry has faced recently. Inflationary pressures, high input costs, and climate challenges have squeezed businesses across dairy, horticulture, viticulture, and sheep and beef, resulting in profitability compression for many.  

Also driving negative wellbeing are employee performance or conflict and not having enough people to rely on for support. These ‘people’ measures could be partly attributed to the tight labour market the sector was forced into during the COVID years, where agribusiness leaders may not have had access to the same level of talent and were compelled to employ people they otherwise might not have. Now, leaders could be faced with those workers not performing at the level they’d expect. 

Tips for agribusiness leaders

Keep connected: This is key for agribusiness leaders and touches on many areas:

  • Stay connected with the numbers in your business, keeping a close eye on your finances and revise your cashflows regularly as necessary.  
  • Stay connected with the operational management, act clearly and early, be proactive to in dealing with challenges before they intensify. Don’t put your head in the sand. 
  • Stay connected with your professional team, including your trusted adviser. They care about you and your business. Communicate early and clearly with your financier if you expect any changes or deviations. 
  • Stay connected with your community and neighbours. Have those over-the-fence conversations and get off the farm and socialise to look after your wellbeing. 

For further wellbeing support, view our Wellbeing section here.

Further support:

Expert thoughts

“Low commodity prices and extreme climactic conditions have created a perfect storm for many businesses in recent times. The sheep and beef space in particular is experiencing considerable challenges, with the global sheep meat market impacted by an oversupply and weakening demand. However, there are green shoots on the horizon for the dairy market as prices rise, and our survey shows leaders are feeling optimistic about their business performance into the future.” In trying times, agribusiness leaders must continue to focus on their wellbeing. Stay connected with your friends and family, farm communities, and trusted advisers – and don’t be afraid to ask for help.”
“It’s heartening to see leaders feeling more positive about their business performance and green shoots of recovery in dairy, beef and venison prices as well as hope of a reduction in over-regulation – however, it’s important to look at wellbeing as well as business metrics. In trying times, agribusiness leaders must continue to focus on their mental health. Stay connected with friends and family, farm communities, and trusted advisers – and don’t be afraid to ask for help.”