The Purdue University Ag Economy Barometer tracks the sentiment of 400 agricultural producers regarding the sector on a monthly basis, said David Widmar, senior research association in the department of agricultural economics at Purdue University.
“Post-election there’s been some excitement and the stock market went up as well,” he told FeedNavigator. “What we’re going to work on in the next few surveys is [to see] what is underpinning the future optimism.”
The report can be read here.
The surveys, which began in October 2015, seek to capture and measure producer sense of agricultural sector prospects in the context of current conditions and as a way to identify 'key drivers' of those emotional responses, he said. It considers the role of aspects like input expenses, corn prices, farm profitability, farmland value, seed and feed ingredient prices.
“It’s been a great chance for us to capture what producers are facing," said Widmar.
The most recent report included a set of unexpected data, said Widmar.
“We have right now a boost in producer sentiment,” he said. “We’re at levels that we’ve not measured in the last 15 months.”
One surprise is that positive sentiment is not tied to stronger feed crop prices, he said.
“Corn prices this summer peaked at $4 and now we’re at $3.70 for corn prices and we’re at 132 points on the barometer – that’s the [highest] level or plateau of sentiment we’ve captured,” said Widmar.
There was a slight positive upturn in November, which was attributed to prices not falling and producers harvesting large feed crop yields, he said.
However, the group did not specifically ask about the election for the survey, though the surprise results likely demonstrate a correlation, said Widmar. In October, 13% said they expected the economy to expand, but post-election 50% said they thought it would – “It was a huge change in what the farmers said they were expecting,” he added.
“We didn’t ask about the election or affiliation with the government,” he said. “We asked about the expectations of the US economy and do you expect the economy to grow.”
However, even with the positive look forward, several respondents said they are still facing present challenges, he said.
Additionally, unless there are changes within the sector it is not expected the current positive response for the future will remain as high, he said. “Producers are optimistic about the future from where we are today, but if we don’t see anything in the commodity markets or [economy] that suggests it will be better in 12 or 24 months [then it may revert],” he added.