Farmer Sentiment Improves Amidst Farm Bill Discussion
Farmer sentiment improved modestly in April as the Purdue University-CME Group Ag Economy Barometer reversed a two-month decline up 6 points to a reading of 123. Both the Index of Current Conditions and the Index of Future Expectations improved in April with the biggest rise taking place in future expectations.
The Current Conditions Index rose 3 points to 129 while the Index of Future Expectations rose 7 points to 120. When asked to look ahead one year, more producers said they expect to be better off financially than now with fewer respondents expecting conditions to worsen compared to both a month earlier and one year earlier.
The Farm Capital Investment Index was virtually unchanged in April at a reading of 43, which was just one point higher than a month earlier. That leaves the index 7 points higher than a year earlier, but still down 32 points compared to two years ago. Among the over 70 percent of respondents who continue to think it’s a bad time for large investments, the top two reasons cited continue to be the increase in prices for machinery and construction and rising interest rates. In a reversal from last month, more respondents chose rising equipment and construction costs (39%) than rising interest rates (33%) as a top reason for this being a poor time for large investments.
Farm Bill discussions are heating up and this month’s survey included a couple of questions to learn more about producers’ perspectives on Farm Bill legislation. Opinions on the likelihood of a new Farm Bill’s passage before the end of the year are divided. Four out of 10 (40%) of producers think that passage of a new Farm Bill this year is either very likely (12%) or at least somewhat likely (28%). But on the other side of the coin, 29% of producers think that the Bill’s passage is either very unlikely (13%) or somewhat unlikely (16%). The survey queried corn and soybean producers regarding what they consider to be the most important aspect of a new Farm Bill to them. Forty percent of respondents chose crop insurance as the most important Farm Bill title, followed by the commodity programs (31%) and conservation titles (13%). The research and extension and renewable energy funding titles were each chosen by 8% of respondents as a top priority.