Although producer sentiment for ag industry conditions declined slightly overall in the November Purdue University Ag Economy Barometer survey, respondents indicated they feel a little better about making large farm investments vs. the month prior.
The university surveys major producers each month to gauge their thoughts on the ag economy’s current conditions, as well as their predictions for the future. The barometer reading shows overall optimism by a little more than 1% vs. October’s reading, though this is still higher than the last few months.
Even so, producers appear more likely to make large investments, such as the purchase of new machinery. The index Purdue uses to measure willingness to make such investments stood at 56 in November, up from a reading of 52 in October. Purdue University ag professors James Mintert and Michael Langemeier note in a summary of the survey’s findings that farmers’ attitudes toward large purchases have been up and down all year.
“Producers were most favorably inclined towards making large investments early in the year when the [index] peaked at a reading of 74,” writes Mintert and Langemeier. “The index weakened in late winter and early spring before rebounding in late spring, just before trade disruptions hit the agricultural sector. By late summer, the index was more than 30 points below its January peak, bottoming out at a reading of 42 in September. However, since September producers’ view regarding the advisability of making large investments has improved, rebounding to a reading of 52 in October and improving again to 56 in November.”