Producers are worried about economic conditions in the farm sector and forecasts of a continued slump in farm income are eroding their confidence about the future, say Purdue University economists. The Purdue Ag Economy Barometer fell by 19 points during February, taking some air out of the “Trump bump” in farmer confidence that began in November and lifted producer sentiment to a record high in January.
Despite the 19-point drop in February, the monthly survey of 400 producers pegged farmer confidence at the second-highest reading, 134, since the barometer was established in October 2015. “It’s clear that producers remain more optimistic than they were last fall,” said Purdue. Coinciding with the presidential election, there was a shift in view that “can best be described as an improvement in sentiment regarding what is still a challenging operating environment.” The stock market also surged after the Nov. 8 election in what analysts called a “Trump bump.”
Some 52 percent of producers responding to the survey said they expect “bad times” over the next year, up 7 points from January. Their view of the longer term – the next five years – was brighter; 42 percent expect bad times, down 3 points from January. Over the past month, USDA forecast cash farm income would stabilize after a three-year plunge from the record set in 2013. Farmers also began to decide what mix of crops to plant this spring and paid attention to discussions of whether corn or soybeans, the two most widely planted crops, will be profitable. Two-thirds of the growers surveyed by Purdue said they expect soybeans are more likely to return a profit.