Wage growth slows across farming sector despite strong outlook

Farm worker pay has stopped climbing as quickly in recent years, following a surge in wages after the pandemic, according to a newly released report.

 

The 2026 Federated Farmers–Rabobank Farm Remuneration Report shows the average farm worker salary rose by $1,367 to $72,778, representing a weighted average increase of 3% across 13 roles.

 

“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 slowdown in wage growth over the past two years mirrors broader labour market trends, where annual increases have typically sat between 2% and 2.4%.

 

“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 marks the 15th salary report produced by Federated Farmers and Rabobank, drawing on a survey of 427 farm employers conducted in early 2026. The data reflects nearly 1,500 employees across 13 different roles, from dairy assistants to arable farm managers.

 

Rabobank General Manager for Country Banking, Bruce Weir, says the report also points to slightly stronger growth in total remuneration packages.

 

“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,” Weir 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 relatively modest increases in both salaries and total package values in recent years, Weir says the sector remains appealing. “The agriculture sector has performed really strongly over the last 18 months and has been the shining light of the New Zealand economy,” Weir 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, he notes that continued pay growth will be key to attracting future workers. “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 workers, the weighted average increase in total package value was 5%, bringing it 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.

 

Although milk prices remain relatively solid, with forecasts between $9.20 and $9.80 per kilogram of milk solids, rising costs are tightening margins. Breakeven costs have climbed to around $8.50kgMS.

 

These pressures have contributed to declining profit expectations among farmers, which slipped into negative territory in early 2026.

 

“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, total package values have risen modestly, increasing 2% since 2024 to $76,296.

 

Salaries in the sector also grew by a weighted average of 2%.

 

While a February survey indicated strong current profitability, farmers remain cautious about the future due to 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.

 

The arable sector recorded a stronger lift, with total package values rising 7% to $73,980.

 

Salaries increased by an average of 5%, although outcomes varied across roles.

 

Machinery operators saw significant gains in both salary and total package value, while general farm hands and managers experienced declines.

 

Dean says the sharp rise in pay for machinery operators reflects increasing technological demands. “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.”

 

He cautions that the smaller sample size in this sector means the results should be viewed carefully, but still reflect broader challenges. “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.”