Farmers painted a slightly more optimistic picture of their expectations in December but still have a handful of policy concerns as the country prepares for a new administration and Congress.
The Ag Economy Barometer, a monthly measurement of producer sentiment conducted by the CME Group and Purdue University, rose seven points in December after dropping 16 points following the November elections; the barometer now has a reading of 174.
The barometer’s indexes of current and future conditions both rose in December as well. Purdue’s James Mintert, the barometer’s principal investigator, said producers raised their expectations for their businesses.
"The rise in the Ag Economy Barometer was primarily driven by farmers' perception that the current situation on their farms really improved,” he said in a release. “The sharp rise in the Index of Current Conditions is correlated with the farm income boost provided by the ongoing rally in crop prices. That appears to be the driving force behind producers' optimism.”
While producers might be bullish on things like equipment purchases and farmland values, producers demonstrated a marked change in their opinion of how the China trade dispute will shape out for U.S. agriculture. In the first quarter of 2020, an average of 76% of respondents said the resolution would ultimately favor American farmers; that figure in the December survey dropped to 47%. Many producers say they’re also worried about more restrictive environmental regulations (83% of respondents), higher estate taxes (71%), and higher income taxes (71%).
The survey results are based on conversations with 400 farmers that took place Dec. 7-11, 2020.
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