7 November 2024
3 minute learn
Farmer sentiment noticed an surprising surge in October forward of the upcoming US election, in line with the most recent Purdue College/CME Group Ag Economic system Barometer.
The index rose to 115, marking a 27-point enhance from September. This increase in sentiment was primarily pushed by an increase in producers’ confidence sooner or later, with the Future Expectations Index leaping 30 factors to 124.
Whereas the Present Situations Index additionally improved, reaching 95, it nonetheless mirrored farmers’ considerations that financial situations this yr are worse than final yr and weaker than the barometer’s base interval of 2015-16 through the early days of a multiyear downturn within the US farm economic system. Regardless of present challenges, the October survey indicated some optimism amongst producers that financial situations might strengthen, avoiding an prolonged downturn within the farm economic system. This month’s survey was carried out from Oct. 14-18, 2024.
“Inspecting responses to the barometer’s particular person questions helps us perceive the producers’ shift towards a much less pessimistic view of the U.S. agricultural economic system,” stated James Mintert, the barometer’s principal investigator and director of Purdue College’s Heart for Industrial Agriculture.
In October, solely 53% of producers anticipated difficult occasions for the U.S. agricultural economic system within the yr forward, a lower from 73% in September. Equally, considerations in regards to the subsequent 5 years eased, with simply 33% of producers anticipating robust occasions forward, down from 48% the earlier month. Moreover, fewer producers count on worsening monetary situations on their farms over the subsequent 12 months, dropping to 23% in October from 38% in September.
“Whereas producer sentiment improved in October, many respondents indicated they’re nonetheless feeling monetary pressure as a result of deterioration of their monetary state of affairs all through 2024,” stated Mintert. “Over half of the producers we surveyed reported that their farm’s monetary situation was worse than a yr in the past, which underscores the continued challenges producers face regardless of their extra optimistic outlook for the yr forward.”
Every month’s survey ends with an open-ended query, permitting respondents to share their ideas and considerations. For October, politics emerged as a frequent matter of dialogue, seemingly influenced by the upcoming elections. Many producers expressed worries about potential coverage modifications impacting their farms and the agricultural economic system, with regulation, surroundings and taxes featured prominently alongside value considerations. When particularly requested about their worries for the upcoming yr, respondents continued to level to increased enter prices and decrease output costs as their major considerations. The pattern of producers’ lowering concern over rates of interest continued this month, with solely 15% citing it as a prime fear in October, down from 26% in late 2023.
Some of the stunning findings from this month’s survey was the rise within the Farm Monetary Efficiency Index. This index measures producers’ expectations concerning their farm’s monetary efficiency over the subsequent 12 months in comparison with the previous yr. In October, the index surged to 90, reflecting a 22-point leap from September and falling simply 2 factors shy of final yr’s degree. Although not solely accountable for the rise within the index, contributing elements seemingly embrace excessive fall crop yields and a stress-free harvest season within the Corn Belt and Plains states. The index’s enchancment additionally suggests a rising optimism amongst farmers about their monetary outlook, with expectations for higher efficiency in 2025 in comparison with 2024. Producers appear to view 2024’s weak revenue prospects as transitory, as there was additionally a modest enchancment within the Farm Capital Funding Index, which reached 42 — a 7-point enhance from September.
Each Farmland Worth Expectation indices rose this month, indicating that producers are sustaining a degree of optimism in regards to the agricultural economic system’s future energy, which may, in flip, assist farmland values. The Quick-Time period Farmland Worth Expectations Index, which regularly correlates with monetary efficiency expectations and the Present Situations Index, climbed to 120, 25 factors increased than the September studying. The long-term index improved to 159, up from 147 the earlier month.
