By Jennifer Stewart-Burton
Producers indicated slightly increased optimism about the agricultural economy as the Ag Economy Barometer increased from 124 in March to 130 in April.
Producer sentiment toward the agricultural economy inched up six points in April, according to the Purdue University/CME Group Ag Economy Barometer.
The barometer increased from 124 in March to 130 in April. The higher reading comes on the heels of two months of declines following January 2017’s all-time high of 153.
April’s 130-point reading represents a vast improvement in producer sentiment since the barometer launched at 106 in April 2016.
The increase is part of a recent trend of higher optimism among producers, said Jim Mintert, director of Purdue’s Center for Commercial Agriculture and principal investigator for the barometer.
“Agricultural producer sentiment since December 2016 has been more positive than at any other time since data collection began, including the base period from October 2015 to March 2016,” he said.
The barometer’s two sub-indices also showed slight improvement with the Index of Current Conditions increasing from 120 in March to 127 in April, and the Index of Future Expectations improving from 126 to 132.
April’s survey asked producers about their expectations for crop prices over the next year. While 54 percent said they expected prices to be about the same in 12 months, another 27 percent expected lower soybean prices. Only 17 percent said they expect soybean prices to be higher.
“This is quite different from a year earlier as the share of respondents expecting lower prices in the April 2017 survey was more than double the 13 percent of respondents expecting lower prices in the April 2016 survey,” Mintert said.
Quarterly, the barometer also includes survey data from 100 industry thought leaders, such as agribusiness executives, agricultural lenders, commodity and farm organization leaders, as well as agricultural economists in the academic and government sectors.
Thought leaders’ expectations for the health of the farm economy increased by 12 percent in April compared to January. But their optimism about the farm economy didn’t carry over to commodity prices, said David Widmar, senior research associate for the Center for Commercial Agriculture and leader of the barometer’s research activities.
“Despite the improvement in thought-leader sentiment from January to April, the group indicated they are less optimistic about both corn and soybean prices than they were back in January,” he said.
Read the full April Ag Economy Barometer report at http://purdue.edu/agbarometer. This month’s report includes additional updates about commodity price expectations among producers and thought leaders, and looks at producers’ willingness to make capital investments – another measure of their confidence.
The April release marks a year since the barometer launched. A supplemental year-in-review report also is available on the website. The report looks at trends in the barometer and supporting areas, such as farmland values and commodity prices.
The free quarterly Ag Economy Barometer webinar is 1:30 p.m. (EDT) Thursday (May 4). Register at https://ag.purdue.edu/commercialag/ageconomybarometer/update/.
The Ag Economy Barometer, Index of Current Conditions and Index of Future Expectations are available on the Bloomberg Terminal under the following ticker symbols: AGECBARO, AGECCURC and AGECFTEX.