Mood Continues to Improve Among Farmers

The Purdue University/CME Group Ag Economy Barometer was 141 in May—a 16-point increase over April and the highest barometer value since January 2017. The rise in the barometer, a sentiment index derived from a monthly survey of 400 agricultural producers across the U.S., was driven both by producers improved view of current conditions and, especially, their more optimistic view of the future.

The Index of Current Conditions rose to 132 during May, which was nine points higher than the previous month. The Index of Future Expectations climbed to 145—a 19-point increase over April. This was the highest future expectations reading since February 2017.

Also in May, farmers demonstrated more optimism about their financial futures. Thirty-six percent of respondents reported that their farms’ financial condition was worse than a year earlier, which was 5 percentage points less than April and the lowest percentage reporting worse financial conditions since the survey began in October 2015. The percentage of producers expecting their farm to be in better financial shape a year from now rose to 30 percent in May from 23 percent in April. It represented the most optimistic response to that question since February 2017.

Producers appear to feel better about the agricultural economy. Looking ahead 12 months, 32 percent of producers expect good times in U.S. agriculture, up from 25 percent a month earlier. Looking ahead five years, 51 percent of respondents said they expect good times in agriculture compared to 44 percent who felt that way in April. The timing of the survey lends itself to the possibility that researchers asked the questions for May when trade tensions between China and the U.S. were more relaxed.

The improvement in overall sentiment on the part of producers has not yet shaped their thoughts regarding buying farm equipment. Twenty-seven percent of respondents said now is a good time to make large farm investments, compared to 28 percent who felt that way in April.