For the second month, farmer sentiment improved as the Purdue University-CME Group Ag Economy Barometer climbed five points. November’s 12-point rise in the Current Conditions Index to a reading of 113 was primarily responsible for the month’s sentiment improvement as the Index of Future Expectations only improved by two points.
Both sub-indices exceeded their year-ago levels in November. The Current Conditions Index increased by 15 percent, and the Future Expectations Index was up 11 percent compared to November 2022.
The improved perception among U.S. farmers regarding their farms’ financial condition and prospects contributed to this month’s more positive sentiment reading. The Farm Capital Investment Index also rose during November, although respondents who said it was a good time to invest were more likely to point to rising dealer inventories of farm equipment as a reason than strong farm cash flows. Farmers continue to be relatively optimistic about future values for farmland as the short-term farmland index held steady while the long-term index drifted lower.
(From the National Association of Farm Broadcasters)
Farmer Sentiment Improves, Producers Credit Stronger Financial Conditions
December 5, 2023
James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture
For the second month in a row, farmer sentiment improved as the Purdue University-CME Group Ag Economy Barometer climbed five points to reach an index value of 115 which left the index 12 percent higher than a year earlier. November’s 12-point rise in the Current Conditions Index to a reading of 113 was primarily responsible for this month’s sentiment improvement as the Index of Future Expectations only improved by 2 points. Both sub-indices exceeded their year-ago levels in November. The Current Conditions Index increased by 15% and the Future Expectations Index was up 11% when compared to November 2022. The improved perception among U.S. farmers regarding their farms’ financial condition and prospects contributed to this month’s more positive sentiment reading. The November Ag Economy Barometer survey was conducted from November 13-17, 2023.
The November reading of the Farm Financial Performance Index improved to 95, up 3 points compared to a month earlier. The index, which is based upon a question that asks producers to compare their farms’ financial performance this year to last year, was 10% higher than at the outset of this fall’s harvest in September and up 25% compared to its lowest point of 2023 back in May. Comparing responses received in May to those in the November survey highlights the change in producers’ perspectives about farm income. When comparing the two surveys the biggest shift was movement toward expecting financial performance to be about the same as last year and away from expecting worse performance than a year ago. In November just 22% of respondents said they expected worse financial performance than a year earlier whereas in May the percentage expecting worse performance was 38%. At the same time, the percentage of respondents expecting financial performance to be about the same as a year earlier rose to 61% in November from 48% who felt that way in May.
The Farm Capital Investment Index rebounded to a reading of 42, up 7 points from October. So far in 2023, the index has ranged from a high of 45 in July to a low of 35 reached in October. Sixteen percent of respondents in this month’s survey said now is a good time to make large investments, nearly matching this year’s high point of 17% which was reached in July. Surveys conducted from July through November 2023 have asked respondents who think it’s a good time for large investments why they feel that way. The percentage of respondents choosing …..