There was a slight uptick in agricultural producers’ sentiment in October, as the Purdue University/CME Group Ag Economy Barometer index rose 4 points to a reading of 110. The improvement in farmer sentiment resulted from farmers’ improved perspective on current conditions on their farms as well as their expectations for the future. Farmers in the October survey are slightly less concerned about the risk of lower prices for crops and livestock and feel somewhat better about their farms’ financial situation than a month earlier. The Index of Current Conditions rose 3 points to 101 while the Index of Future Expectations rose 5 points to 114.
Farmers’ more optimistic view of their farms’ financial situation was reflected in the Farm Financial Performance Index, which rose 6 points in October compared to September. This October index value of 92 was the highest farm financial performance reading since April and pushed the index 7% above its reading from a year ago. The index’s rise stood in contrast to USDA’s’ forecast for 2023 net farm income to fall below 2022’s record income level.
Just over one-third (35%) of producers in the survey said they expect farmland values to rise in their area in the upcoming year, while nearly two-thirds (65%) of survey respondents expect farmland values to rise over the next 5 years. As a result, the Short-Term Farmland Value Expectations Index changed little, dropping just one point compared to a month earlier, while the Long-Term Farmland Value Expectations Index rose three points.
EDITOR’S TAKE:
It is difficult to keep from yawning as we continue to report good news from the farm sector. This report from Purdue University is simply awesome. Farmers/ranchers always seem to worry early in the growing season. Then during the growing season any weather-related activity or political issue seems to heighten their concerns. As they enter harvest, there is more concern over yields and finishing before winter weather arrives. But lo and behold, generally the weather is great, yields are better than expected, prices fluctuate some, but they have already forward contracted a good portion of their production - and just like that optimism returns.
Farmers and ranchers are doing quite well, thank you. Overall, they are more optimistic about their future, many input prices are coming down and they see their balance sheet remain healthy due to very strong land values. So, don’t hesitate to take advantage of this optimism. Promote AgPack® - that will help them plan for 2024. Put your inventory on AgTruckTrader.com and be sure to promote IRS Section 179 to help reduce their 2023 tax burden. Promote your parts and service as well. Put it all out there – farmers/ranchers are currently your best customer prospects!
