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Ag Barometer Shows Post-Election Improvement
Post-Election Improves Monthly Ag Barometer
Producer sentiment about the agricultural economy soared on the heels of November’s presidential election, according to the December Purdue/CME Group Ag Economy Barometer report released Tuesday (Jan. 10).
The December survey results landed the barometer at an all-time high reading of 132—a 16-point jump from the November survey. The barometer is based on a monthly survey of 400 U.S. agricultural producers.
Producer optimism surrounding both current conditions and, especially, future expectations drove the increase. The Index of Current Conditions rose to 102 from November’s 87, while the Index of Future Expectations increased from 130 in November to 146 in December.
“Looking back at the data from the last several months, it’s apparent that we’ve seen a big swing in producers’ expectations about the future,” said James Mintert, barometer principal investigator and director of Purdue’s Center for Commercial Agriculture. “Although both the Current Conditions and Future Expectations Indices increased the last couple of months, it was the increase in the Index of Future Expectations, which jumped 51 points since October to reach an all-time high in December, that triggered the sharp rise in the barometer.”
Producers’ improving sentiment doesn’t seem to be driven by changes in corn and soybean prices, Mintert said. For example, March 2017 CBOT corn futures were slightly weaker during the November and December survey periods than during the October survey. On the soybean side, January 2017 CBOT futures were unchanged in November and only slightly stronger in December than those during the October survey collection period.
Additionally, improved economic sentiment extends beyond just agriculture, said David Widmar, senior research associate and leader of research activities for the barometer. In October and December, producers were asked about their expectations for the broad U.S. economy and the results were surprising.
“The contrast in sentiment from the October survey—three weeks prior to the U.S. elections—and the December survey—five weeks after the elections—is remarkable,”