The Purdue/CME Group Ag Economy Barometer took a turn to the upside for the January reading. Farmer sentiment increased nine points from the December reading of 126, showing more optimism.
The 135 reading is the highest it’s been since October 2017, and was the largest one month improvement since January 2017.
According to the release, this improvement is related to the barometer’s two sub-indices: the Index of Current Conditions and the Index of Future Expectations.
Compared to December 2017, the Index of Future Expectations rose 11 points, and the Index of Current Conditions increased five points.
One question the survey asked was whether producers think they’re better off financially than they were the previous year. 43 percent of respondents say they are worse off, while 14 percent are better off than they were in January 2017.
The 43 percent is a significant number, and to David Widmar, an agricultural economics at Purdue University, it shines a light on the difficult foreign financial economy.
“This has improved a lot from a year or 18 months ago when that was nearly 8 out of 10 producers, so this downtrend has been an important part of the improvement in the ag economy and producer sentiment,” said Widmar.
One possible reason for the increase in sentiment is the passage of the tax reform bill. 40 percent of respondents think their taxes will be about the same now that the reform has passed, compared with 43 percent of producers who think their taxes will be lower.
Each month, 400 agricultural producers from the U.S. are surveyed.