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Farmer sentiment jumps up in November as harvest winds down

Ag Barometer Outlook Farmer sentiment jumps up in November as harvest winds down. (Purdue/CME Group Ag Economy Barometer/James Mintert)

Agricultural economy sentiment tied with its highest reading of 2019, according to the November Purdue University/CME Group Ag Economy Barometer. Rising for a second month in a row, the barometer improved to a reading of 153 in November, up 17 points from October and matching the previous high set in July.

The Index of Current Conditions saw the biggest boost, soaring 38 points to a reading of 153 in November, while the Index of Future Expectations rose modestly, up 7 points to a reading of 153, as more producers believe that current and future economic conditions will continue to improve. The barometer is based on a mid-month survey of 400 U.S. crop and livestock producers.

“Except in the northern Corn Belt, farmers were wrapping up their fall harvest in November and yields were better than expected earlier this year, which helped boost sentiment along with news that the trade dispute might be settled soon.” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Since early fall, cattle prices also rallied substantially, helping make both cattle ranchers and feeders feel better about their operations’ finances.”

Producers’ optimism about making farm capital investments also improved during November. The Farm Capital Investment Index rose to a reading of 71 in November, its highest reading since February 2018 and 12 points above October’s index value. This month’s rise in the investment index coincided with a sharp upward move in the Current Conditions Index, suggesting that, as producers’ perspective regarding their farm’s current situation improved, they were more favorably inclined toward making farm capital expenditures.

Confidence in a quick resolution to the U.S. and China trade dispute increased to its highest point since the question was first posed in March of this year. In November, 57 percent of respondents stated they expect a resolution to the trade dispute soon; as recently as August of 2019, only 29 percent had expected a quick resolution to the dispute. There was also an increase in the percentage of producers who expect the trade dispute to be resolved in a way that favors U.S. agriculture. In November, 80 percent of respondents said they expected a beneficial outcome to the trade dispute with China, up from 75 percent in October.

Read the full November Ag Economy Barometer report at https://purdue.ag/agbarometer. This month’s report also looks at producers’ views on farmland values at both 12-months and 5-years out. The site also offers additional resources – such as past reports, charts and survey methodology – and a form to sign up for monthly barometer email updates and webinars. Each month, the Purdue Center for Commercial Agricultural provides a short video analysis of the barometer results, available at https://purdue.ag/barometervideo.

The Ag Economy Barometer, Index of Current Conditions and Index of Future Expectations are available on the Bloomberg Terminal under the following ticker symbols: AGECBARO, AGECCURC and AGECFTEX.

About the Purdue University Center for Commercial Agriculture

The Center for Commercial Agriculture was founded in 2011 to provide professional development and educational programs for farmers. Housed within Purdue University’s Department of Agricultural Economics, the center’s faculty and staff develop and execute research and educational programs that address the different needs of managing in today’s business environment.

About CME Group

As the world’s leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest ratesequity indexesforeign exchangeenergyagricultural products and metals. The company offers futures and options on futures trading through the CME Globex® platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world’s leading central counterparty clearing providers, CME Clearing. With a range of pre- and post-trade products and services underpinning the entire lifecycle of a trade, CME Group also offers optimization and reconciliation services through TriOptima, and trade processing services through Traiana.

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and E-mini are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. BrokerTec, EBS, TriOptima, and Traiana are trademarks of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB, and Traiana, Inc., respectively. Dow Jones, Dow Jones Industrial Average, S&P 500, and S&P are service and/or trademarks of Dow Jones Trademark Holdings LLC, Standard & Poor’s Financial Services LLC and S&P/Dow Jones Indices LLC, as the case may be, and have been licensed for use by Chicago Mercantile Exchange Inc. All other trademarks are the property of their respective owners. 

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