Agricultural producer sentiment, as measured by the Purdue University/CME Group Ag Economy Barometer, fell in March. This marks the second month of decline, after a 3-month increase following the election. Despite the recent decrease, producer sentiment is still high compared to most months going back to October 2015, when the survey was first conducted.
The March decline is due mostly to producers feeling significantly less optimistic about the future. The Index of Future Expectations was just 126, compared to January’s high of 169. In contrast, the Index of Current Conditions went up in March, from 105 the previous month.
There was also a big movement in how farmers are doing now compared to a year ago. In March, only 51% said they were worse off than last year, down from 67% in February.
The percentage of farmer expecting “good times” also decreased for both the 1-year and the 5-year time periods. One in four said they expect the general agricultural economy to see “good times” in the next 12 months (down from 35% last month), while 41% expect good times over the next 5 years (down from 47%).
The report authors conclude:
“Producers responding to the March survey were somewhat less optimistic about the long-term outlook for the agricultural economy than they were earlier in the winter. To the extent that producers were expecting major changes in the regulatory and tax environment following the November elections, the most recent reading of the barometer could signify the growing realization that changes, if they are to take place, could take a long time to implement.”