Report: Improved farmer sentiment continues in January

The Purdue University-CME Group Ag Economy Barometer Index rose again in January, to a reading of 130, 4 points above its 2022 year-end index value.

The January survey results also pushed the index 34% above its 2022 low point which occurred last June.

The barometer’s modest rise in January was primarily attributed to better expectations for the future as the Future Expectations Index rose 5 points to 127 while the Index of Current Conditions, with a value of 136, changed little compared to December.

Highlights

• The Financial Performance Index dropped to 93 this month, down from 109 in December, but that primarily reflects producers’ being asked to look ahead to 2023 and compare it to 2022 rather than comparing 2022 to 2021, which is what the question in December did.
• The January reading of the Farm Capital Investment Index climbed 2 points to 42. January marked the second month in a row the index rose, the first time that’s occurred since the fall of 2020. January’s modest rise pushed the index up 35% compared to its November 2022 low, although the index remained 7% lower than a year earlier.
• The Short-Term Farmland Value Index declined again in January, falling to 120, 4 points below its year-end reading. Compared to a year earlier, this month’s short-term index was down 22 points, a decline of 15%.
• The Long-Term Farmland Values Index rose slightly to 142 from 140 in December. Over the last year, the long-term index has declined just 2% as producers continue to retain a more optimistic long-term than short-term view of farmland values.
• This month’s survey included questions about leasing farmland for carbon sequestration. Despite producers’ ongoing interest in carbon contracts, few have signed a contract. Just 1% of survey respondents in January reported that they had signed a carbon contract.

The Purdue University-CME Group Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from January 16-20, 2023.

— Feed & Grain Staff