A measurement of the state of mind in farm country is at an all-time high as producers report optimism about future financial conditions due to a recent commodity market price rally and another round of direct payments from the Department of Agriculture.
According to the Ag Economy Barometer maintained by Purdue University and the CME Group, farmer sentiment shot up in October to levels that exceed any other month since the survey began in 2015. The previous high, set in February before the onset of the coronavirus pandemic, was 168; the October reading was 183.
“The late summer/fall rally in commodity prices, combined with government program payments arising from the second round of the Coronavirus Food Assistance Program (CFAP 2), appeared to be the primary drivers behind the sentiment improvement,” a release accompanying the results noted.
Producers also noted their improved current financial conditions, with 25% reporting their farm was better off now financially than during the same period last year; Purdue and CME say that’s the highest reading that question has received since the survey’s inception. That improved financial expectation also comes with anticipation of higher land values; 40% of respondents said they expect higher cash rental rates in 2021 than in 2020.
Producers are also more optimistic about the “phase one” trade deal with China. In September, 53% of survey respondents said it was unlikely China would fulfill the food and ag import requirements in the deal. In October, the view of the deal flipped, with 59% of respondents now saying China will likely fulfill the deal’s commitments.
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