Farmers More Inclined to Invest in Capital

Farmer sentiment improved in June, and that optimism was reflected in producers’ willingness to make capital investments.

The Purdue University-CME Group Ag Economy Barometer rose 14 points in June to a reading of 117. The barometer’s rise was fueled by improvements in both the Index of Current Conditions, which rose to a reading of 99—a 19 percent bump over May, and the Index of Future Expectations which climbed to 126, or 12 percent higher than in May.

Farmers’ perspective regarding whether or not now is a good time to make large investments in their farming operation improved markedly over the last two months. The Farm Capital Investment Index recovered to a reading of 60 in June, 10 points higher than a month earlier and 22 points higher than the low reached in April.

In a related survey question, researchers have for the past four months been asking farmers about their plans for farm machinery purchases in the upcoming year compared to a year ago. Responses to this question suggest producers’ plans for machinery purchases dipped noticeably during April and May but recovered to their March level in the June survey.

Four out of ten farmers said that as a result of concerns about COVID-19, they are conducting more business online.