WEST LAFAYETTE, Ind. — Purdue University’s Ag Economy Barometer fell three points from August to September, indicating a slight dip in producer optimism.
Although the overall change was minor, farmers were significantly more pessimistic about current conditions on the farm.
“You can see that there was a pretty sharp drop in the Index of Current Conditions,” said Jim Mintert, director of Purdue’s Center for Commercial Agriculture.
“It fell to a reading of 100 from 122 a month earlier, while the Index of Future Expectations actually rose a little bit from 125 to 131 in September.”
Farmers became less willing and less optimistic about making large investments in their farm operations in September.
The reading on the Farm Capital Investment Index fell to 47 from 56 a month earlier, sharply below the reading of 67 in July.
“Farmers became a little less optimistic about farmland values on this survey,” Mintert said. “When asked to look 12 months ahead, the percentage of farmers expecting lower values increased slightly to a reading of 22%.”
The percentage expecting higher farmland values a year ahead fell slightly to a reading of 11%.
“Periodically, we ask farmers about their expectations for profitability in crop production,” Mintert said. “When you compare the results this month from results earlier this spring, there’s a significant difference.”
In May, 41% of farmers expected to see lower profitability in crop production over the next 12 months. In August, that fell to 34%. In September, that fell again to 21%.
“When considered jointly with this month’s decline in the Index of Current Conditions, this could be a signal that growers expect better times in 2020 compared to 2019, possibly because they are looking forward to a return to more normal growing conditions and crop production in 2020,” the report states.
Read the complete report at: www.ag.purdue.edu/commercialag/ageconomybarometer.