Low prices for products, along with high input costs and an expected large crop are conspiring to keep farmers historically pessimistic about the future. The DTN/The Progressive Farmer Agriculture Confidence Index (ACI) shows the concerns focus on unstable commodity prices and uncertain farm incomes linger.
Producers’ perceptions over their current situations have dropped steadily, if not dramatically, from 118.0 last August to 109.1 in March to 101.5 now, remaining just in the optimistic range but at the lowest level since the ACI started in 2010. The value of 100 is considered neutral. Values above 100 indicate optimism, whereas values below signify pessimism.
The confidence index, which surveyed 500 crop and livestock producers Aug. 5-17, measures the sentiments of crop and livestock producers on their overall agriculture sector impressions. DTN/The Progressive Farmer conducts the ACI three times a year – before planting, prior to harvest and after harvest. Producers also rate current and long-term input prices and net farm income to gauge their attitudes toward the present situation and future expectations.
Since last year’s record harvest producers have encountered falling commodity prices. This combination continues to weigh on producers overall confidence about the agriculture industry. Last August, producers’ confidence for the ag industry crossed into the pessimistic range for the first time at 99.8, followed by an all-time confidence index low of 98.8 in March. Producer confidence rose slightly to 99.4 in August.
“Producers’ sentiments on their current situation have eroded the past year,” said DTN Markets Editor Katie Micik, director of the confidence index. “Commodity prices have not rebounded while costs continue to rise, causing farm incomes to drop. Yet, producers think things can’t get any worse.”
The report goes on to say the USDA recently estimated 2015 net farm income at $58 billion, down 36 percent from last year. But 70 percent of those surveyed believe farm income will stay the same or improve in the next year.
Midwestern farmers are the most pessimistic about their current situation and future expectations. Southwestern farmers’ attitudes are mixed, and producers in the Southeast are optimistic overall and positive about their current situation, but they are pessimistic about their future expectations.