Farmer sentiment sees little change; optimism on farm finances growing
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The overall sentiment among ag producers nationwide stayed relatively steady in December, according to the latest Purdue University/CME Group Ag Economy Barometer. But experts say optimism among farmers has been growing since the end of summer.
The barometer is calculated monthly from a telephone survey of 400 agricultural producers across the country. The newest survey was conducted Dec. 4-8, and saw the barometer fall just one point to 114.
While the barometer is 12 points lower than December 2022, Purdue University Center for Commercial Agriculture Director James Mintert said a better comparison would be with late summer heading into the fall harvest.
“We saw an improvement in the current condition index as we headed through the fall. I think that reflected the improvement in yields we were picking up when we talked to people, not only in the survey, but just talking to people when we were out doing meetings,” Mintert said on the Purdue Commercial AgCast.
Mintert noted that the U.S. Department of Agriculture’s 2023 farm income outlook in November was up about $10 billion compared to its forecasts issued in the late summer.
“I think they were picking up the exact same thing the farmers were picking up, that things were a little better here at the end of the year, in retrospect, than the expectation was in late summer, and I think that showed up in our surveys across the fall,” he said. “We saw an improvement across the board, and I think a lot of it was driven by the fact that income levels were a little better than people expected.”
The barometer’s Farm Financial Performance Index rose two points compared to the previous month, which Mintert said could be attributed primarily to revenues coming out of improved crop yields.
The survey also asked farmers what their biggest concerns are for their operations. Purdue said 31% of respondents said higher input costs in December, though that number is down from 42% in January.
However, 26% of respondents expressed concerns about the risk of lower prices for crops and livestock in December, up from 16% in January. The third-highest concern among farmers, 24%, was rising interest rates, though about one-third said they expect rates to decline in 2024.
You can connect to the full results of the December 2023 barometer by clicking here.