Farmer sentiment improved markedly in August as the Purdue University-CME Group Ag Economy Barometer rose to a reading of 144, which is 26 points higher than July.
The improvement in producer sentiment was the result of improved perceptions regarding current conditions and, especially, better expectations for the future.
The Index of Current Conditions rose 13 points in August to a reading of 124 while the Index of Future Expectations rose 33 points to a reading of 154.
The barometer and its two sub-indices all posted their most positive readings since February 2020 when record highs were established and before the pandemic began.
The Farm Capital Investment Index rose five points compared to a month earlier to a reading of 65 which, similar to the other indices, was the most positive reading since February. When asked specifically about plans to purchase farm machinery in the upcoming year, fewer farmers (48 percent) in August reported that they plan to reduce their purchases this year than in prior months. While 48 percent is a high percentage of farmers who plan to hold back on machinery purchases, this percentage has been declining since reaching a peak of 65 percent in May.
Farmers also became more optimistic about U.S. agriculture’s trade prospects in August. For months, the percentage of farmers reporting that they expect exports to increase over the next five years ranged from 55 to 57 percent. In August, the percentage of producers expecting exports to rise spiked to 67 percent. This represents a notable departure in sentiment when compared to the April-to-July time frame.
The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from August 17-21.