Rural News – Farm pay growth slows after strong gains – Federated Farmers

Farm worker pay growth has levelled off in the last few years, after a post-pandemic period of rapid growth, a new report shows.

The 2026 Federated Farmers-Rabobank Farm Remuneration Report, released today, shows the average salary for a farm worker increased by $1,367 to $72,778, or a weighted average rise of 3% across 13 job positions.

“For some of those roles, the increases have been higher,” Federated Farmers employment spokesperson Karl Dean says.

“For example, the average salary for a dairy farm assistant – the most common position on a dairy farm – rose to $63,359 this year, a rise of 5%.

“Wages for an arable farm machinery operator jumped a massive 30% to $82,651.”

The moderation in farm worker pay rises in the last two years is consistent with broader labour market trends, with wage growth across the economy typically 2-2.4% annually.

“Keep in mind, too, that average annual salaries in our sector jumped 13% between 2022 and 2024, with a weighted average rise of 17% for sheep and beef farm roles,” Dean says.

This is the 15 th farming salaries report Federated Farmers and Rabobank have produced, this time collating results from a survey of 427 farm employers in early 2026.

The findings cover data relating to nearly 1,500 employees across 13 positions, ranging from dairy farm assistant to arable farm managers.

Bruce Weir, Rabobank General Manager for Country Banking, says the report highlights slightly stronger growth in Total Package Values (TPV) for farm employees.

“The salary figures don’t include the range of other benefits provided to farm employees, which can include things like vehicle usage, meat, firewood, phone and power allowances,” he says.

“For many farm employees, those extras can add up to several thousand dollars a year.

“Overall, the weighted average TPV across all farm employees lifted 5% to $77,030, nearly $4,252 more than the average salary.”

Despite the relatively modest lift in salaries and TPV over the last two years, Weir says the sector’s recent strong performance makes it an attractive option for young Kiwis.

“The agri sector has performed really strongly over the last 18 months and has been the shining light of the New Zealand economy,” he says.

“The sector’s long-term outlook remains positive, and the strong investment we’re currently seeing should flow through to new job opportunities in the years ahead.”

However, Weir says ongoing salary growth is also essential to ensure the sector continues to entice the next generation into agri careers.

“Remuneration matters to young people, and attracting strong talent will depend on on-farm salaries keeping up with – or surpassing – the wider employment market.”

For dairy farm workers, the average weighted rise in TPV was 5%, up to $77,186.

“Pay rises for dairy farm staff were stronger in entry- and mid-level roles, and while the labour market remains competitive for experienced dairy workers, wage pressures have eased,” Dean says.

The dairy sector is facing increasing margin pressure despite solid commodity prices.

While forecast milk prices remain relatively strong at $9.20-$9.80 per kilogram of milk solids, breakeven costs have risen to around $8.50kgMS.

That’s eating into margins for many operators and is reflected in farmers’ weakening profit expectations, which fell to a net negative position in early 2026, Dean says.

“These factors help explain why dairy farm pay increases have been more incremental compared to bigger lifts in the previous years,” Dean says.

In the sheep and beef sector, the weighted average increase in TPV since 2024 was 2%, rising to $76,296, despite difficult operating conditions in 2024/25.

Sheep and beef salaries rose by a weighted average of 2%.

A Federated Farmers survey in February this year showed strong profitability on sheep and beef farms, but much more caution over forward expectations, reflecting ongoing cost pressures and market volatility.

“Even with conditions improving, farmers will be conscious of how cyclical schedules are, and are likely to take a cautious approach to reinvesting in staff until returns prove more reliable and consistent,” Dean says.

In the arable sector, the average TPV rose to $73,980, a weighted average increase of 7%.

Salaries increased by a weighted average of 5% but the results varied across arable positions.

Machinery operators saw big increases in both TPV and salary, but general farm hands and farm managers experienced declines.

Deans says the pay boost for machinery operators is largely attributable to the lift in technology in harvesting and other equipment coming onto farms, and the greater level of knowledge required to operate this equipment.

“These skills are becoming harder to find and come at a cost of remuneration.

“The lift in pay also reflects the fact that the past two wet harvests have increased the number of hours worked by operators to get the harvest done and extra time spent getting crops established.”

Dean says that while a relatively smaller sample size from this sector means results should be interpreted with some caution, the outcomes reflect economic and operational pressures.

“There is global oversupply in herbage seed, softer prices are putting a dampener on returns to farmers and wetter conditions over the past season have reduced yields.

“The decline in pay for general hand and manager positions is down to reduced profitability in the sector.”