WEST LAFAYETTE, INDIANA, U.S. — Agricultural producer sentiment rebounded in October as perceptions of current conditions and future expectations improved, the Purdue University/CME Group Ag Economy Barometer showed.
The barometer rebounded to 136, a 22-point increase from September, and nearly equal to its reading a year ago. The Index of Current Conditions rose 19 points and the Index of Future Expectations was up 24 points.
“We continue to see large month-to-month variations in the barometer readings as a result of swings in major commodity prices and emerging news about trade negotiations with key ag trade partners,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
The Trump administration announced the renegotiated U.S.-Mexico-Canada Agreement in early October. To better understand producers’ views, the survey asked whether they believed the agreement would relieve their concerns over farm income in the next 12 months. While just over 60% of producers said the agreement would at least somewhat relieve their farm income concerns, 25% of producers said it would not.
Despite the monthly increase for current conditions, sentiment in that area is well below levels recorded in winter and spring 2018.
Ag producers’ views with respect to making farm investments improved in October, but producers remain cautious about making large investments in their farming operations. The percentage of producers indicating now is a bad time to make large investments declined modestly to 72 in October, down from 78 a month earlier, while the percentage that said now is a good time to make large investments rose to 24 from 20 in September.
Despite declining soybean prices, 77% of farmers who planted soybeans in 2018 said they would maintain the same acreage in 2019. However, one in five growers said they would reduce acreage with about two-thirds saying the reduction would be by more than 10%.