Farmers Show Improved Willingness to Spend

Results released Tuesday from Purdue University and the CME Group show that farmers’ moods improved slightly in May, and they were more willing to make capital investments.

The Ag Economy Barometer improved by seven points compared to the May report. The reading of 103 still lags behind the optimism farmers felt in February.

In an indication of the volatility of national and world events, the current-year May reading is virtually identical to the May 2019 reading, in spite of a dramatic rise in the intervening months.

The Farm Capital Investment Index, which assesses producers’ willingness to make big investments, rose to 50 in the May survey from a reading of 38 the month before.

Commentary from the survey administrators cautioned however that while the capital investment index represents a “substantial one-month improvement,” it still registers 30 percent below the February survey.

More than 70 percent of producers who responded said they are either “very worried” or “fairly worried” about coronavirus’ impact on their farm’s profitability. More than 60 percent said they expect farmers’ equity positions to decline over the next year.