Agricultural economy sentiment tied with its highest reading
of 2019, according to the November Purdue University/CME Group Ag Economy
Barometer. Rising for a second month in a row, the barometer improved to a
reading of 153 in November, up 17 points from October and matching the previous
high set in July.
The Index of Current Conditions saw the biggest boost,
soaring 38 points to a reading of 153 in November, while the Index of Future
Expectations rose modestly, up 7 points to a reading of 153, as more producers
believe that current and future economic conditions will continue to improve.
The barometer is based on a mid-month survey of 400 U.S. crop and livestock
producers.
"Except in the northern Corn Belt, farmers were
wrapping up their fall harvest in November and yields were better than expected
earlier this year, which helped boost sentiment along with news that the trade
dispute might be settled soon." said James Mintert, the barometer's
principal investigator and director of Purdue University's Center for
Commercial Agriculture. "Since early fall, cattle prices also rallied
substantially, helping make both cattle ranchers and feeders feel better about
their operations' finances."
Producers' optimism about making farm capital investments
also improved during November. The Farm Capital Investment Index rose to a
reading of 71 in November, its highest reading since February 2018 and 12
points above October's index value. This month's rise in the investment index
coincided with a sharp upward move in the Current Conditions Index, suggesting
that, as producers' perspective regarding their farm's current situation
improved, they were more favorably inclined toward making farm capital
expenditures.
Confidence in a quick resolution to the U.S. and China trade
dispute increased to its highest point since the question was first posed in
March of this year. In November, 57 percent of respondents stated they expect a
resolution to the trade dispute soon; as recently as August of 2019, only 29
percent had expected a quick resolution to the dispute. There was also an
increase in the percentage of producers who expect the trade dispute to be
resolved in a way that favors U.S. agriculture. In November, 80 percent of
respondents said they expected a beneficial outcome to the trade dispute with
China, up from 75 percent in October.
Read the full November Ag Economy Barometer report at
https://purdue.ag/agbarometer. This month's report also looks at producers'
views on farmland values at both 12-months and 5-years out. The site also
offers additional resources -- such as past reports, charts and survey
methodology -- and a form to sign up for monthly barometer email updates and
webinars. Each month, the Purdue Center for Commercial Agricultural provides a
short video analysis of the barometer results, available at
https://purdue.ag/barometervideo.