Producers less optimistic in current conditions
Producer sentiment held steady in the latest Purdue University/CME Group Ag Economy Barometer.
Jim Mintert is the director of the Purdue Center for Commercial Agriculture.
“You look under the hood though and there was some change,” he says. “People were a little less optimistic about current conditions whereas the index of future expectations rose.”
The overall Ag Economy Barometer was 178. The Index of Future Expectations rose five points to 169 and the Index of Current Conditions fell 7 points to 195. Mintert says the sub-indices remain historically strong despite the changes.
He tells Brownfield farmers surveyed are more optimistic about their farms’ financial performance.
“Our Farm Financial Performance Index was up 13 points to a reading of 138, versus 125 a month earlier and that index had been hanging in a range of about 116-125 for the last five months so it did jump up a bit,” he says. “It was a little interesting to see that improve because it’s based on a question that says how do you expect your farm’s financial performance to be this year versus last year and people were pretty positive about that, yet it wasn’t backed up by an increase in the Current Condition Index.”
The Farm Capital Investment Index declined 13 points to 75. Mintert says he thinks the index fell because… “it’s based on a question that asks producers if it’s a good or bad time to make large investments in buildings and equipment and I suspect the building part might have been the challenge there. If you look at what has happened to building costs—they have skyrocketed recently and in some parts of the country, it’s even difficult to schedule a crew to put up a building. So, I wonder if we’re seeing a divergence between buildings and machinery.”
Fourteen percent of farmers surveyed plan to increase farm machinery purchases, compared to 11 percent in March and nine percent in February.
The monthly national survey of 400 agricultural producers was conducted April 19-23.