Each month, Purdue University’s Center for Commercial Agriculture surveys farmers about their expectations for the agricultural economy over the next five years and this is reflected in the Ag Economy Barometer. From the November survey, the barometer jumped an unexpected 24 points as soybean and corn futures prices rallied.
The shift was largely driven by the Index of Future Expectations, one of the barometer’s components, which climbed to 130 in November, up from 95 in October. The Index of Current conditions increased only slightly, from 85 in October to 87 in November.
“Producer sentiment about the future climbed partly because of a significant rally in futures prices for corn and especially for soybeans this fall,” says Jim Mintert, barometer principal investigator and director of the Center for Commercial Agriculture. “The rally included not just nearby futures contracts, but extended to prices for both 2017 and, to a lesser extent, 2018 harvest.”
Mintert says it’s important to note that the jump in producer sentiment had more to do with decreased pessimism about the future of the agricultural economy than it did with a notable shift toward a positive outlook.
The share of respondents expecting “bad times financially” declined dramatically from 56 percent in October to 42 percent in November. However, the share of respondents expecting “good times financially” increased just 2 percent in the same period from 35 to 37 percent.