Agricultural producer sentiment fell in February after three straight months of gains, according to the latest reading of the Purdue/CME Group Ag Economy Barometer.
The barometer dropped to 134 in February, a 19-point decrease from January’s record high of 153. Even with the drop, the February reading is still the second-highest since data collection began in October 2015.
Both of the barometer’s component indices—the Index of Current Conditions and the Index of Future Expectations—dropped from their January levels.
“The concern producers expressed about current economic conditions is consistent with other measures of conditions in the farm economy,” said James Mintert, barometer principal investigator and director of Purdue’s Center for Commercial Agriculture. “For example, during the recent annual Agricultural Outlook Forum, USDA projected net farm income in 2017 will fall to $62 billion, a 9 percent decrease from 2016 and a 50 percent drop from the peak net farm income set in 2013.”
With uncertainty surrounding U.S. trade policy since the November election, the Purdue/CME Group survey asked producers to rate the importance of agricultural exports to the U.S. economy. Ninety-three percent reported that agricultural exports were important or very important. Nearly 80 percent also said that agricultural exports were important or very important for their individual farms.
The rapidly approaching spring planting season is another factor with the potential to influence producer sentiment. Two-thirds of February survey respondents said they expect soybeans to be more profitable than corn this year.
“Corn and soybean growers are finalizing their planting decisions as we speak,” Mintert said. “The expected profitability of corn versus soybeans in 2017 will be one of the key factors that determines the crop mix. The indications that more producers think soybeans will be more profitable means that there will be extra interest in USDA’s annual Planting Intentions Report.”
The Planting Intentions Report releases on March 31.
Read the full February Ag Economy Barometer report at http://purdue.edu/agbarometer. This month’s report includes readings of the Index of Current Conditions and the Index of Future Expectations, as well as producer sentiment toward farmland values. The website also offers additional resources, such as past reports, charts and survey methodology, and a form to sign up for monthly barometer email updates and quarterly webinars.