The Purdue University-CME Group Ag Economy Barometer rose 4 points in October to a reading of 110. Improving sentiment resulted from farmers’ improved perspective on current conditions on their farms as well as their expectations for the future. The Index of Current Conditions rose 3 points to 101 while the Index of Future Expectations rose 5 points to 114. Farmers in this month’s survey were a bit less concerned about the risk of lower prices for crops and livestock and felt somewhat better about their farms’ financial situation than a month earlier.
The Farm Financial Performance Index rose to a reading of 92, its first time reading over 90 since spring. This month's update said that reports of higher than expected corn and soybean yields in some Corn Belt locations, along with a modest rally in corn prices, likely contributed to this month’s rise in the financial conditions index.
The Farm Capital Investment Index, however, dropped to a reading of 35, its lowest reading of the year so far.
Some 78% of farmers said now is a bad time to make large investments in their farm operation, while 13% said now was a good time for such investments. Among those who said it was a bad time, 41% chose rising interest rates as their primary reason, the most popular choice and the highest percentage to date who have selected it as their primary reason. Among those who said its a good time to make large investments, 24% pointed to strong cash flows as their primary reason for thinking its a good time and another 24% pointed to higher dealer inventories.