Plunging dairy prices are the reason behind a two-year low in rural confidence, measured by Rabobank.

The latest quarterly Rabobank Rural Confidence Survey shows low dairy prices are dampening farmer sentiment.

It's at its lowest level since September 2012, with 37% of farmers having a negative outlook on the rural economy.

That's compared to 24% in the last quarterly survey.

And the number of farmers with a positive outlook is down to 20%.

Almost half expect conditions to remain the same over the next year.