WEST LAFAYETTE, Ind. — Farmer optimism about the ag economy was the highest it’s been since the Ag Economy Barometer survey began in fall 2015.
The barometer reached a record high reading of 183 in October — up 27 points from September.
Farmers were more optimistic about both current conditions and the future of their farms.
“I wasn’t surprised it went up, but I was a little surprised by how much,” said Michael Langemeier, associate director of the Center for Commercial Agriculture at Purdue University.
“We’ve had some pretty good trade news the past few weeks. And if you look at the WASDE report, it looks like exports for both corn and soybeans are going to be higher than what they were in the previous year. We’ve also seen strength in prices.”
Additionally, the second round of Coronavirus Food Assistance Program payments likely led to a boost in optimism.
“Since this survey was done, we have seen a little bit of weakness in corn and soybean prices,” said Jim Mintert, director of the Center for Commercial Agriculture.
“But they’re still substantially stronger than they were earlier in the year. I think that was reflected in the Index of Current Conditions, especially. “That rose from a reading of 142 in September to 178 — that’s record high.”
Producers were also more optimistic about farmland values.
Nearly 40% of respondents said they expect higher cash rental rates for farmland in 2021 than in 2020.
The Farm Capital Investment Index also reached a new record high in October with a reading of 82, up 9 points from a month earlier.
In a follow-up question, over half of respondents said they were going to hold their upcoming farm machinery purchases steady with a year earlier, compared to just less than a third who planned to do so back in April.
Lastly, farmers were more optimistic about trade with China.
Fifty-nine percent of farmers are now expecting China to fulfill its Phase One trade agreement with the United States, compared to 47% who felt that way in September.
Learn more at www.ag.purdue.edu/commercialag/ageconomybarometer.