Farmer optimism is record high in a pandemic year of extremes
Farmer confidence is the highest in the five-year history of the Ag Economy Barometer, said Purdue University on Tuesday. The monthly survey of large-scale farmers and ranchers has returned dynamic results in a year disrupted by the pandemic by setting record highs twice in eight months, punctuated by its lowest reading in four years.
Confidence surged by 27 points to 183 in October, the highest reading since the barometer’s debut in October 2015. More farmers than ever said their farms were in better financial condition than a year ago and a solid majority expected good times in the near to medium term.
“The late summer/fall rally in commodity prices, combined with government payments arising from the second round of the Coronavirus Food Assistance Program (CFAP2), appeared to be the primary drivers behind the sentiment improvement,” wrote Purdue economists James Mintert and Michael Langemeier, who oversee the barometer.
Nearly six in 10 respondents said they expected China to fulfill its commitment to buy $36.6 billion of U.S. food, agriculture, and seafood products this year. A month earlier, slightly less than half said China would comply with the goals of the “phase one” trade agreement. The latest survey was conducted from Oct. 19-23, after a steady parade of sales of corn, soybeans, and pork for export to China.
All the same, customs data say China imported $12.9 billion of U.S. ag products through the end of September, slightly more than one-third of the 2020 target, said the Peterson Institute for International Economics.
The Ag Barometer reached a then record of 168 in February, coinciding with the signing of the Sino-U.S. “phase one” agreement. It then plunged to 96 in April, the lowest since October 2016, as the pandemic slowed the U.S. economy. Readings regained strength in late summer and early fall, to soar explosively in October.
The Ag Economy Barometer is available here.