May 20, 2024

Barometer shows boost in farmer optimism

By Erica Quinlan

Farmer sentiment improved in June. The Ag Economy Barometer is based on responses from 400 U.S. agricultural producers.

WEST LAFAYETTE, Ind. — Farmer sentiment about the economy rebounded in June, according to the Purdue University/CME Group Ag Economy Barometer.

“The barometer improved substantially this month to a reading of 117, compared to a reading of 103 a month ago, and up 21 points compared to its low point back in April,” said James Mintert, director of Purdue’s Center for Commercial Agriculture.

“Farmers became more optimistic about both current conditions on their farming operations, as well as their future expectations.”

The Future Expectation Index rose 14 points to a reading of 126. The Index of Current Conditions rose 16 points to a reading of 99.

“Farmers had a more favorable view about making large investments in their farming operations this month than they did a month earlier,” Mintert said.

The Farm Capital Investment Index rose to a reading of 60 compared to 50 a month ago and 38 two months ago.

Farms were also less pessimistic about farmland values.

“When we asked them to look ahead 12 months, the percentage of farmers expecting farmland values to decline fell to 21% this month from 29% a month ago, and 35% that felt that way two months ago,” Mintert said.

Farmers are still fairly concerned about the impact of coronavirus on profitability, but less so than they were earlier this spring.

“Back in March, 40% of the farmers in our survey said they were very worried about the impact of coronavirus on profitability,” Mintert said. “This month, that was down to 27%.

“Earlier this spring, over half of the farmers in our survey said they expected their farm’s financial performance to be worse than last year. On this month’s survey, that was down to 42%.”

The boost in optimism on this month’s report is likely due to a combination of factors, including favorable spring planting and the announcement of Coronavirus Food Assistance Program details.

However, 64% of farmers said that they think it will be necessary for Congress to pass another bill to provide more economic assistance to U.S. farmers.

Read the full Ag Economy Barometer report at https://purdue.ag/agbarometer.