Long Term Ag Outlook Strengthens

Ag producers are feeling more optimistic about the health of the agriculture economy despite recent declines in commodity prices.  David Widmar, a Purdue University ag economist who works on the The Purdue University/CME Group Ag Economy Barometer, said there are two components at which they look.  One that looks at the current economy, and the other looks into the future.

“The second component where a lot of the sentiment has improved and come from is the Index of Future Expectations.  We saw that index jump from 107 to 121.  What we really see going on here is a lot of building in what producers think the next few years might have in store for the ag economy.”

Widmar said there were two chief reasons for the increase in the long-term index.

“The expectations for higher commodity prices.  In July, more respondants thought that commodity prices would be higher a year from now.  And the second part, an increase in the number of respondents who think that farmland values will be higher.”

Up to 23% of respondents think that farm land will increase in value in the next year, the highest percentage since November 2015.

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