In the newest agriculture outlook survey there has been a significant jump in producer optimism. In the Purdue/CME Group Ag Economy Barometer, sentiment measured in November is up, partially due to rallies in soybean and corn futures prices. The barometer surveys 400 producers around the U.S each month, and the new number is 116, 24 points higher than the previous month and the best measure since October 2015.
David Widmar from the Purdue Center for Commercial Agriculture said the barometer project with CME Group has been public for a year and a couple years in the making.
“It’s been a great partnership between the two of us and it’s really been an opportunity for us to report what producers are thinking and how they feel about their operation and the broad ag economy. And we can tell that story,” he said. “As ag economists we regularly meet with producers and we’ve always anecdotally talked about optimism waning or pessimism growing, and we never had a way of quantifying that. Today with this tool we have that.”
Widmar told HAT prices are an important component in determining sentiment, but the survey looks beyond commodity prices.
“Looking at 2017 are we going to get some help in the form of lower costs of inputs? In the Corn Belt, do we have lower fertilizer prices? How much does cash rent adjust this winter, and what do farmland values do? So, we’re going to keep an eye on this through the winter as producers prepare. We been asking about management strategies as we talked about last month, so producers are really thinking about how they can adjust and reflect the current economy and try to break even and make a little bit of money next year.”
The November uptick was largely driven by the Index of Future Expectations, one of the barometer’s components, which climbed to 130 in November, up from 95 in October. The Index of Current conditions increased only slightly, from 85 in October to 87 in November.