U.S. agricultural producers became more optimistic again in September as the Purdue University-CME Group Ag Economy Barometer climbed to 156, the highest reading for the index since the pandemic began last winter and 12 points higher than one-month earlier.
The index is up 38 points since July and is 60 points higher than its 2020 low established back in April. In September, producers were more optimistic about both current conditions and the future for agriculture than they were in August. The Current Conditions Index, with a reading of 142, was 18 points higher compared to a month earlier and the Future Expectations Index rose 9 points to a reading of 163.
The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from September 21-25, 2020.
The improvement in the barometer and its two primary sub-indices occurred against the backdrop of USDA’s September 18th announcement of the second round of Coronavirus Food Assistance Program (CFAP 2) payments for U.S. agricultural producers.
The program provides up to $14 billion in additional assistance to agricultural producers determined to have suffered from market disruptions and costs because of COVID-19. Program details were released on September 21st, just as data collection for this month’s survey began.
Additionally, fall harvested crop prices strengthened from the time data was collected for the August to the September surveys, in a continuation of a rally that got underway in late summer. For example, in west-central Indiana cash corn prices rose nearly $0.20 per bushel from late August to late September, while cash soybean prices rose nearly $1 per bushel.
The resulting revenue boost from these two sources likely provided much of the impetus for this month’s 18-point rise in the Index of Current Conditions and the 12-point rise in the Ag Economy Barometer.
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