Farmers are growing more pessimistic about their current condition, but have become more optimistic since the presidential election, though their views vary with income, according to the DTN/The Progressive Farmer
Agricultural Confidence Index.
Surveys of 500 farmers in December produced an index of 98, on a scale where 100 or above indicates optimism. The figure was way up from 72 in August.
Farmers are surveyed three times per year, "before spring planting, just prior to harvest, and at year's end, to determine their opinions about their current economic situation and about that situation in the year to come," Greg Horstmeier reports
for DTN. "Those answers create a score for farmer's 'current condition,' how they feel about their businesses at the time of the survey, and a score for their 'future expectations' for the coming year."
The index is created from those two scores.
The current conditions score was 44.2, the lowest since the index began in 2010, but the future expectations score was 127. (DTN graphic: Index results in blue, current-situation scores in red, and expectations in green)
The current conditions are not good. "Commodity prices show little sign of more than minor price blips to cash in on," land and input costs show only minor relief, and "acreage estimates for 2017, along with weather predictions, give little chance of a short U.S. crop," Horstmeier writes.
So, why are future expectations so optimistic? "The only thing you can tie that positivity to is the election. Farmers have a lot of hope for the new president," said Robert Hill, principal of Caledonia Solutions
and the creator of the index,.
The future-expectations score varied with income. Farmers earning $100,000 to $249,999 a year were at 112.6, those making $250,000 to $499,999 had a score of 129.9, and those with incomes of $1 million or more scored 79. Hill said the results suggest "that farmers in the lower income levels were more concerned with regulatory and other non-profit-related issues that a Trump presidency has promised to remove. Larger farmers, faced with a higher level of concern over land costs, employee needs, and commodity prices in general may put those worries ahead of the more emotional regulatory issues."