The latest Purdue/CME Group Ag Economy Barometer showed farmer optimism improving slightly in October, coming in at an index of 135. That’s actually the third-highest level since the survey began two years ago.
The modest improvement during October came about because of increasing optimism for what lies ahead. The Index of Future Expectations increased from 130 to 137 in October. But, the Index of Current Conditions was a little lower than the previous month.
Compared to the July survey, fewer producers expect higher corn, soybean, and wheat prices over the next 12 months. At the same time, producers don’t expect lower prices during that same time period, either. Fewer producers expect to make major management changes from a year ago, specifically when it comes to fertilizer application.
Similar to last year, 19 percent of producers expect to lower their seeding rates and 35 percent of farmers will adjust their seed variety or hybrid package in 2018. Only one-third of producers plan to reduce fertilizer rates when compared to last year. That’s down from 46 percent when the survey was conducted last year, likely due to lower fertilizer costs. 80 percent of producers expect farmland rental rates to be unchanged in 2018.
From the National Association of Farm Broadcasting News Service.
Improved Producer Optimism in October
The latest measure of agricultural producer sentiment improved slightly during October to 135, its third-highest level since data collection began two years ago (Figure 1). Although stronger than a month earlier, the Purdue/CME Group Ag Economy Barometer remained within the trading range it has been in since last February, fluctuating between a low of 124 and a peak of 139. The modest improvement in the barometer during October was the result of producers’ improved expectations regarding the future as the Index of Future Expectations increased to 137 from a reading of 130 in September, whereas the Index of Current Conditions actually weakened slightly (Figure 2).
Figure 1. The Purdue/CME Groups Ag Economy Barometer, October 2015 to October 2017.
Figure 2. The Index of Current Conditions and Index of Future Expectations, October 2015 to October 2017.