Ag Barometer Increase Pushed By Livestock Sector

Farmer sentiment inched higher in October as the Purdue University/CME Group Ag Economy Barometer increased three points to a reading of 129.  The uptick was fueled primarily by a rise in the Index of Current Conditions, which climbed eight points to 130, while the Index of Future Expectations climbed only one point to 129.

Farmers Are Not Feeling Great Right Now

Purdue University’s Dr. James Mintert said digging into the details reveals the struggles many farmers are facing.

“This really kind of illustrates what's going on," Mintert said.  "The 'Worse Off' category is really up sharply since May [the strongest barometer reading of the year]. That was up two points this month, but it's 21 points higher than it was in May. And you know at 49% of the people in the survey saying worse off.  That kind of, I think, tells the tale a little bit.”

Livestock Producers Feeling Much Better About The Future

Mintert noted that it’s the strength of the livestock sector that’s keeping the barometer as high as it is right now.

“Over the next five years, are widespread good times or bad times more likely? And we differentiate that based on livestock and crops," Mintert said.  "On the livestock side, 70% are saying good times, and on the crop side, only 30%. And that really trickles through a lot of our results, this difference in the perspectives that people have on the crop side versus the livestock side.”

In addition, the barometer shows crop farmers expect their financial performance to fall well below that of a year ago, while livestock producers anticipate results similar to the previous year.  Between beef, dairy and hogs, roughly 25% of respondents nationwide are in livestock.

What Role Does Current Policy Play?

Policy uncertainty continues to influence farmer sentiment.  In October, 58% of producers said they expect increased use of tariffs by the U.S. to strengthen the agricultural economy, up from September but still below the 70% reported this spring.  Meanwhile, 16% of respondents said they were uncertain about the impact of tariff policies on the agricultural economy, double that of both April and May.

Despite this uncertainty, roughly 70% of producers said they believe the U.S. is headed in the "right direction." 

Click Here for additional numbers from October’s barometer.  Mintert said the barometer survey took place October 13th-17th.

If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com