The Ag Economy Barometer improved to a reading of 136 in October, up 15 points compared to September, which pushed the barometer back to the same level observed in October 2018. This month’s upswing in the ag economy sentiment index was driven by an improvement in ag producers’ assessments of both current and future economic conditions in agriculture. The Index of Current Conditions rose from 100 in September to 115 in October and the Index of Futures Expectations also rose 15 points to a reading of 146. The Ag Economy Barometer and related indices are based upon results from a nationwide telephone survey of 400 U.S. crop and livestock producers. This month’s survey was conducted from Oct. 14-22, 2019.
Producers had a more favorable view regarding making large investments in their farming operations when surveyed in October compared to September. The Farm Capital Investment Index rose to a reading of 59, 12 points higher than a month earlier. The investment index has been relatively volatile in recent months, dipping to a low of 37 in May before rebounding sharply in early summer. The October reading takes the investment index back to within 8 points of its July 2019 peak of 67.
Given the large prevented plantings of both corn and soybeans in 2019, there could be a large increase in U.S. planted acreage in 2020. To learn more about farmers spring planting plans we asked farmers that grew corn or soybeans this year if they intended to increase, decrease or keep their acreage of those two crops the same in 2020? Approximately three-fourths of both corn and soybean producers said they did not plan to increase or decrease their acreage of those two crops in 2020. However, 14% of corn growers and 12% of soybean growers in our survey said they intended to increase their acreage of those two crops, respectively.
Two-thirds of corn growers who told us they will increase corn acreage in 2020 said they intend to increase their corn acreage by 10% or more and one-third of them said they planned to increase corn acreage by more than 20%. Exactly 80% of soybean growers who told us they will increase their soybean acreage in 2020 told us they expect to increase their soybean acreage by 10% or more and 40% of them said they actually intended to increase their acreage by more than 20%.