Farmer sentiment climbed to a new record-high in October, according to Purdue University and CME Group’s Ag Economy Barometer. The barometer that’s based on a survey of 400 ag producers jumped 27 points from September to 186 points, which topped the previous record high set in February 2020 before the pandemic took hold. The survey was conducted Oct. 19-23.
Producers were more optimistic about both current and coming conditions. The index on future expectations jumped 23 points from September to 186 points. The index of current conditions surged 36 points from September to 178 points.
“The late summer/fall rally in commodity prices, combined with government program payments arising from the second round of the Coronavirus Food Assistance Program (CFAP 2), appeared to be the primary drivers behind the sentiment improvement. ... The combination of good yields and rallying crop prices set the stage for an additional boost in farmer sentiment,” the related report said.
Twenty-five percent of survey respondents indicated their farms were better off financially today vs. the same time last year. The authors of the report provided the following perspective on that response: “Although at first glance that might not sound very positive, it’s by far the most positive response farmers have provided since the inception of the barometer survey in fall 2015, and was up 11 points compared to a month earlier. The previous record high response to this question occurred in November 2019, when just 16% of respondents said their farm was better off financially than in the year ago period.”
Optimism about trade with China also climbed in October, with 59% of respondents indicating they expect China to fulfill the food and ag import requirements of the Phase 1 trade agreement. The month prior, just 47% of those surveyed expected that to occur. The number of producers expecting overall exports to climb over the next five years rose seven percentage points from September to 65%.
An increasing number of producers expect farmland values to climb over the next year, and attitudes toward equipment purchases are also improving.