Confidence Among Crop Producers Moves Higher, Livestock Producers Report A Dip

Thanks to rising corn and soybean prices, as well as improved export prospects, farmer sentiment strengthened in November.  The Purdue University/CME Group Ag Economy Barometer jumped to 139 last month, the highest reading since June.  Purdue University’s James Mintert said farm country is feeling better about the future.

“Current condition index actually fell a couple of points this month, whereas the future expectation index was up 15 points compared to where it was in October," Mintert said.  "And so that transition really, I think, companies what was taking place with respect to trade prospects, but clearly people became more optimistic about trade in the month of November relative to where they were in October.”

Mintert noted that Financial outlooks improved, but overall producers remain cautious: capital investment sentiment slipped further, and fewer farmers view today as a good time to expand.

“If you look at crops versus livestock, and keep in mind what happened in between that October survey and the mid-November survey that we did, cattle prices dropped pretty sharply," Minert said.  "They were still at profitable levels, but pretty sharp decline. And when you ask livestock outlook for the next five years versus the crop outlook for the next five years, it was radically different, right? The livestock numbers dropped, I think, all the way from 70, which was one of the highest readings we ever got in percentage of good times, all the way back to 49%. So a 21 point drop, whereas the crop side basically moves sideways.”

A majority of producers in November reported that they still expect to receive a supplementary support payment from USDA, but they were less confident of receiving the payment compared to September’s survey.

A majority of producers expect American tariff policies to prove beneficial to the agricultural economy in the long run, but the percentage of respondents who said they are uncertain about the impact was roughly double the percentage who said they were uncertain in the spring.

In addition, two-thirds of all producers said that “things in the U.S. today are headed in the right direction”, but that was lower than a month earlier, while the percentage who chose “wrong track” rose from 28% to 33%.

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