Farmer Sentiment Improves

The Ag Economy Barometer rebounded in August to a reading of 129 after falling to 117 in July. Although the producer sentiment index increased by 12 points in August, it remains below its late spring readings.

More producers in August suggested now is a good time to make large investments in the farm.

The shift in producer sentiment occurred primarily because producer’s perception of current conditions improved. The index that measures farmer sentiment in response to current conditions increased to a reading of 121. It was 99 in July.

The Index of Future Expectations rose by six points in August to 132.

Researchers gathered data in mid-August after USDA outlined the farmer assistance package in general terms but before it provided details on how payments would be allocated.

Producers’ shifting perspective on the U.S. ag economy was also evident in their response to a question about making large investments in their farming operation. In August, 26 percent of respondents said now is a good time to make large investments, up from 20 percent in July. Correspondingly, the percentage of producers that felt now is a bad time to make large investments fell by eight points to 65 percent in August.

Pessimism diminished among producers about the direction of the U.S. ag economy in the year ahead. In August, 22 percent of respondents said they expected good times in agriculture in the year ahead, up modestly from 19 percent in July. The bigger change from July was among those expecting bad times in U.S. agriculture, which declined from 61 percent in July to 52 percent in August.

Producers’ opinions were evenly split regarding whether the administration’s $12 billion relief plan will relieve their concerns about the impact of tariffs on their farms’ income. Nearly half of respondents (47 percent) said the relief plan would either completely (4 percent) or somewhat (43 percent) relieve their concern; 47 percent of respondents said “not at all.”