WEST LAFAYETTE, Ind. and CHICAGO — Farmers’ sentiment about the agricultural economy climbed to 139 in July — the highest level recorded in 2017 since January, according to the Purdue University/CME Group Ag Economy Barometer.
The barometer, which is based on a survey of 400 U.S. agricultural producers, exceeded recent barometer readings by 8 to 9 points, breaking out from a range of 130 to 131 during the months of April, May and June.
Overall, farmers’ sentiment this summer has been significantly more positive than it was during the summer of 2016, when the Ag Economy Barometer ranged from the mid-90s to the low 100s, according to Jim Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
The barometer’s two sub-indices also were higher in July, with the Index of Current Conditions rising from 132 in June to 142 in July, and the Index of Future Expectations climbing from 131 in June to 138 in July.
The July 2017 index also marked the second-highest level for farmers’ sentiment in the history of the barometer, which launched in October 2015.
A key factor contributing to the more positive outlook among agricultural producers includes expectations for higher prices of key commodities.
As part of the most recent Ag Economy Barometer survey, producers were asked if they anticipated higher, lower or similar prices for grain, cotton and oilseed in the next 12 months. Of the 400 respondents, 39 percent said they expected to see higher prices for corn in the coming year.
That compares to the 24 percent that was reported in the April 2017 survey and 22 percent in the July 2016 survey.
Expectations for increases in soybean and wheat prices were nearly as strong as they were for corn, according to Mintert.
The improvement in producers’ expectations for grain and oilseed prices corresponded with market volatility during the early summer.
For example, corn futures prices, based on the December 2017 futures contract, traded down to a low of about $3.75 in late June 2017 to a high of more than $4.15 in early July over a span of just a few trading days.
The price increase seems to have helped boost producers’ price expectations, the report indicated.