The barometer climbed 30 factors to a studying of 145
5 December 2024
3 minute learn
Farmer sentiment jumped once more in November, with the Purdue College/CME Group Ag Economic system Barometer climbing 30 factors to a studying of 145. This marked the very best degree of farmer optimism since Might 2021, pushed by appreciable good points in each the Present Situations and Future Expectations indices. The Future Expectations Index noticed the most important bounce, rising 37 factors to 161, whereas the Present Situations Index elevated 18 factors to 113.
The November sentiment increase displays rising optimism a couple of extra beneficial regulatory and tax atmosphere for agriculture following the US election. This month’s survey was carried out from Nov. 11-15, 2024.
In November’s survey, farmers reported a notably extra constructive outlook for his or her operations and the broader agricultural economic system. The proportion of producers anticipating their farm’s monetary efficiency to enhance over the following 12 months climbed to 33%, up from 19% in October. Optimism in regards to the US agricultural sector additionally surged, with 34% of farmers anticipating good occasions financially within the subsequent 12 months, greater than double October’s 15%.
Wanting forward 5 years, over half of November’s respondents (52%) predicted widespread prosperity for US agriculture, a noticeable improve from 34% the earlier month. This rising confidence was additionally mirrored in farmers’ funding plans, as 22% reported that it’s a great time for big capital investments, in comparison with 15% in October.
Farmers’ improved sentiment additionally carried over to their funding outlook, because the Farm Capital Funding Index rose 13 factors in November to a studying of 55 — the very best degree since Might 2021. The change in funding sentiment was partly pushed by expectations of stronger monetary efficiency in 2025 in comparison with 2024. For the second consecutive month, the proportion of producers anticipating higher monetary circumstances within the 12 months forward elevated, climbing to 25% in November from 16% in October. This constructive shift drove the Farm Monetary Efficiency Index as much as 106, marking a 16-point improve from October and a considerable 38-point bounce since September.
Following the enhancements within the short-term and long-term farmland worth indices in October’s survey, each indices noticed modest declines in November. The Quick-Time period Farmland Worth Expectations Index dropped by 5 factors, whereas the Lengthy-Time period Farmland Worth Expectations Index decreased by 3 factors. Regardless of these small decreases, the indices remained comparatively robust, with the short-term index at 115 and the long-term index at 156.
To achieve perception into how farmers’ sentiment may align with potential coverage shifts following a change in presidential administrations, barometer surveys included a number of policy-related questions earlier than and after the 2020 and 2024 elections.
Within the wake of the 2024 election, farmers’ views on environmental rules skilled a pointy reversal. In October, 41% of respondents anticipated a extra restrictive regulatory atmosphere over the following 5 years, whereas solely 10% anticipated much less restrictive rules. Nonetheless, the November survey noticed a dramatic shift, with simply 9% of surveyed farmers anticipating stricter rules and 55% predicting a extra favorable, much less restrictive regulatory panorama.
There was a modest shift from October to November 2024 when requested about tax expectations, however a notable distinction with responses following the 2020 election. In November 2024, greater than half (55%) of respondents anticipated earnings tax charges to stay unchanged, in comparison with simply 25% in 2020. Equally, 57% of respondents within the November survey anticipated property tax charges to remain the identical over the following 5 years, a big improve from 28% in November 2020.
“Whereas optimism is up, farmers are additionally expressing issues in regards to the potential dangers to agricultural commerce, with many fearing {that a} commerce struggle may considerably impression US exports,” stated James Mintert, the barometer’s principal investigator and director of Purdue College’s Middle for Industrial Agriculture.
Forty-two % of November’s survey respondents indicated they consider it’s “doubtless” or “very doubtless” that US agriculture may face a “commerce struggle,” probably resulting in a major decline in agricultural exports.
“As we transfer into 2025, farmers’ outlook for agriculture stays constructive, however they’re carefully monitoring the evolving political panorama and its potential impression on each coverage and worldwide commerce,” Mintert stated.
