AGRI-MARKETERS' CONFIDENCE HIGH SHORT-TERM, DIPS LONG-TERM
Apr. 4, 2013
Source: Agri Marketing magazine and American Business Media (ABM) Agri-Council
The Agri-Marketers' Confidence Index ticked up slightly for current conditions, but retreated on the long-term outlook. The poll, conducted among corporate agribusiness managers in late March showed the majority think the current ag economy is very positive and, in fact, is better than when the poll was conducted last October.
On a scale of 0 (lowest) to 100 (highest), the overall Agri-Marketers' Confidence Index (AMCI) scored an 88, which compares to 85 when the poll was conducted in October 2012.
The current conditions index increased slightly while future expectations are down, but the overall index is still very optimistic.
This shift in sentiment was predicted by last fall by Steve Custer, Executive VP/Chief Operating Officer at Farm Journal Media and Chairman of the American Business Media Agri-Council's Research Committee, when he said: "I suspect the current conditions index will show improvement the next time as we work through the fallout from this year's dramatic drought. There's just some uneasiness now about when producers will get crop insurance and how final harvest will affect pricing."
To view that report click here.
Custer notes that at the time this latest poll was taken, the USDA's just-released Prospective Plantings and Grains Stocks reports hadn't hit the markets. Also the recent moisture in a lot of the Midwest has left the current outlook even more positive than late last fall. "I suspect if we'd take the poll this week, after the limit down on corn we saw last week, we'd see a more subdued outlook on current conditions," Custer explains.
Expectations about commodity prices are reflected in the future outlook index which asks Agri-Marketers their outlook 12 months from now. That index, while remaining positive historically, retreated considerably from 85 to 48 in the most recent reading.
Custer notes, "Everyone - producers, analysts and Agri-Marketers - were all expecting lower commodity prices later this year and we all know how lower prices change the mood in farm country. These latest USDA Reports caused the lower prices sooner than most expected!"
The poll was conducted by Agri Marketing magazine and the ABM's Agri-Council and was sent to 228 managers of companies that develop and sell products to North American crop and livestock producers. A total of 87 (38%) company representatives participated in the poll, including a very wide sampling of large and small enterprises, as well as both crop and livestock-oriented companies.
"The AMCI is modeled closely along the lines of the well-known consumer confidence studies regularly reported by The Conference Board," reports Custer. "It is an indicator designed to measure the confidence or the degree of optimism among agribusiness marketers on the state of the agribusiness economy. It looks at both their outlook for their own business now and in the future, as well as their perception of the outlook for their customers - the nation's farmers and ranchers."
AMCI is calculated by looking at the percentage of positive versus negative responses.
To read how AMCI is calculated and its complete results, click here.
A few of the highlights include:
*71% think the current business conditions for their companies are positive, while only 10% believe it is negative.
*36% think the agricultural market will be better than now, while 7% think it will be worse.
*24% think the general outlook for farmers and ranchers will by better 12 months from now.
*33% expect their marketing communications budget will increase one year from now.
Confidence Survey Results