Farmers and ranchers say they are in a better financial situation than a year ago, according to the Ag Economy Barometer’s monthly survey. The Purdue economists who oversee the barometer said farmers are markedly more optimistic than last summer, with one factor being the expectation of lower taxes in coming years.
For the first time, a majority of producers — 52 percent — “indicated they expected extreme weather events to impact crop yields,” said Purdue. “One of the challenges producers faced this spring has been an oscillation from cool/wet periods to hot/dry spells.” A growing fraction of farmers, reaching one-third in the latest survey, said they changed their marketing plans because of weather expectations.
“The fact that nearly one-fifth of the survey respondents expect taxes to decline in both the short run and longer run suggests that an expectation of more favorable tax environment is one of the drivers behind the improvement in producer sentiment since last October,” said Purdue. The Ag Barometer has a reading of 131, similar to the preceding two months and far above the 104 of last June. The barometer soared in a “Trump bump” following the November presidential election, to peak at 153 in January.
In the survey of 400 producers, 13 percent said their farming operation is in better shape than a year earlier and 46 percent said in worse shape. Last summer, only 3 percent said they were in better condition while two-thirds said they were in worse shape. Purdue economists said the change in sentiment could be due to record-high 2016 yields, an upturn in futures prices in late 2016 and lower production costs for this year. Looking ahead, 60 percent say they expect their financial performance this year to be about the same as expected at the start of the year, 12 percent say it will be better and 28 percent say worse.