A monthly survey from Purdue University and the CME Group showed farmer views of the ag economy improved for the second straight month in November.
The Ag Economy Barometer — based on responses from producers Nov. 13-17 — marked a 5-point increase to 115, up 12% over the same month last year.
The positive trend is credited to improved perceptions of financial conditions and prospects among agricultural producers. The November survey revealed a 12-point increase in the Index of Current Conditions to 113, while the Index of Future Expectations rose by 2 points to 116. The Farm Financial Performance Index reached 95, up three points from October, a rebound from its low point in the spring.
“Farmers' expectations regarding financial performance have improved, with fewer producers expecting worse performance than a year ago,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
The Farm Capital Investment Index rebounded to 42 in November, up seven points from October, reflecting changing perspectives on the investment climate. Notably, the primary reason for favorable conditions shifted from “strong cash flows” to “higher dealer inventories,” indicating a potential moderation in farm equipment price rises.
Top concerns for the upcoming year include higher input costs (32%), rising interest rates (26%), and lower crop/livestock prices (20%). A notable shift in concerns occurred throughout the year, with fewer producers worrying about higher input costs and more expressing concern about rising interest rates and lower crop/livestock prices.
The November survey coincided with Congress voting to extend the 2018 farm bill as part of a deal to avoid a government shutdown. With another year of the existing safety net programs ahead, the survey also asked corn and soybean producers for their thoughts on the Agriculture Risk Coverage and Price Loss Coverage farm programs. However producers did not demonstrate a strong preference for either program; some 52% of soybean producers declined to choose either program in the survey, while the same was true for 43% of corn growers. Of those who reported a preference, two-thirds said they planned to sign up for ARC.
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