Farmer sentiment in the United States has seen a significant rebound, driven by a more optimistic view of the future, according to the Purdue University/CME Group Ag Economy Barometer. The index, which measures the health of the US agricultural economy, rose 17 points in June to a reading of 121. An improved outlook for the future primarily drove this increase, while perceptions of current conditions remained unchanged from May.
The Index of Future Expectations, which gauges producers’ outlook for the future, rose 25 points to a reading of 123. In contrast, the Index of Current Conditions, which assesses producers’ views of current economic conditions, remained flat at 116.
James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture, noted that the current conditions in the farming economy continue to present challenges for some producers. He revealed that four out of ten producers stated that their financial situation has deteriorated compared to a year ago.
However, the survey also found that farmers are increasingly optimistic about their financial future. In June, 20% of respondents said they expected their financial condition to improve over the next year, compared to 13% in May. Meanwhile, only 32% expect their farm’s financial situation to decline over the upcoming year, compared to 44% who responded that way in May.
The Farm Financial Performance Index also rose in June, likely due to a late-May to early-June rally in harvest-time prices for corn and soybeans and optimism towards positive returns for cattle producers. In June, 50% of respondents said they expect “good times” for livestock producers in the next five years, up from 37% in May.
Despite the optimism, nearly 75% of respondents still feel that now is the wrong time to invest in their farming operations. Respondents cited rising interest rates and increasing prices for equipment and new construction as critical reasons for viewing now as the wrong time for investments.
The survey also revealed producers were more optimistic about farmland values in June. The short-term index, which asks producers about their outlook over the next 12 months, jumped 16 points to 126. Meanwhile, the long-term index, which asks producers to look ahead five years, rose a more modest 6 points to a reading of 151.
The Ag Economy Barometer is calculated monthly from 400 U.S. agricultural producers’ responses to a telephone survey. The results provide valuable insights into the health of the U.S. agricultural economy and the sentiment of farmers, which can have significant implications for the broader economy.
Read the complete results of the Barometer here.