The Purdue University/CME Group Ag Economy Barometer index climbed to a reading of 115 in October, up 27 points (19.3%) from September and five points (4.5%) above year-ago. The biggest driver of improved farmer sentiment was an increase in producers’ confidence in the future, as the Future Expectations Index jumped 30 points to 124. The Current Conditions Index also rose in October but by a smaller amount. At 95, the current conditions reading conveys that farmers think economic conditions are worse than last year and weaker than during the barometer’s base period of 2015-2016, which was in the early days of a multi-year downturn in the U.S. farm economy. Producers this month expressed some optimism that economic conditions will improve and not precipitate an extended downturn in the farm economy.
The Ag Barometer noted: “One of the most surprising findings from this month’s survey was the increase in the Farm Financial Performance Index. This index measures producers’ expectations regarding their farm’s financial performance over the next 12 months compared to the past year. In October, the index surged to 90, reflecting a 22-point jump from September and falling just two points shy of last year’s level. Though not solely accountable for the rise in the index, contributing factors likely include high fall crop yields and a stress-free harvest season in the Corn Belt and Plains states. The index’s improvement also suggests a growing optimism among farmers about their financial outlook, with expectations for better performance in 2025 compared to 2024. Producers seem to view 2024’s weak income prospects as transitory, as there was also a modest improvement in the Farm Capital Investment Index, which reached 42 — a seven-point increase from September.”
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