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Farmer Sentiment Falls Post-Election

Farmers perception of current conditions on their farms actually improved

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U.S. farmers sentiment weakened following the November 2020 elections, as the Purdue University-CME Group Ag Economy Barometer fell 16 points from a month earlier to a reading of 167.

Although this month’s reading was nearly equal to the pre-pandemic high set back in February, it was 9% lower than the sentiment reading taken just two weeks prior to the 2020 elections.

The decline in the Ag Economy Barometer was the result of weakened expectations for the future on the part of agricultural producers, as the Index of Future Expectations declined to a reading of 156 in November, 30 points below the October reading.

On the other hand, farmers perception of current conditions on their farms actually improved.

The Index of Current Conditions, buoyed by the ongoing rally in agricultural commodity prices, rose by 9 points from October to November setting a new record high for the index of 187. 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 November 9-13, 2020.

Although farmers’ expectations for the future weakened, they remained relatively optimistic about making large investments in their operations, as the Farm Capital Investment Index changed little in November with a reading of 80, just 2 points below the index’s record high set back in October. However, when asked more specifically about their plans with respect to farm machinery purchases, survey respondents pulled back somewhat in November compared to October.

Farmers’ attitudes regarding the trade dispute with China have changed over the course of 2020. Back in January and February of this year, 80 percent of survey respondents said they expected to see the trade dispute with China be resolved in a way that benefits U.S. agriculture.

Optimism about the trade dispute started to fade last spring with approximately two-thirds of respondents during the spring quarter still expecting a favorable outcome. On the November survey, the percentage of farmers expecting a favorable outcome for U.S. agriculture declined to 50%, the lowest percentage recorded since we first posed this question in the summer of 2019.

To read the full report, click here.

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