AGRI-MARKETERS' OUTLOOK REMAINS POSITIVE DESPITE DROUGHT, LIVESTOCK LOSSES
Nov. 12, 2012
Source: Agri Marketing magazine and American Business Media (ABM) Agri-Council
A poll conducted among corporate agribusiness executives last moth showed the majority think the current ag economy is positive.
On a scale of 0 (lowest) to 100 (highest), the overall Agri-Marketers' Confidence Index (AMCI) scored an 87, which compares to 81 when the poll was conducted last June.
The current conditions index retreated some while future expectations are up and overall are still very optimistic.
"Sentiment around the current conditions index appears to be some uneasiness about the drought as we see a big jump in the future conditions index for both producers and agri-marketers' own companies," reports Steve Custer, Executive VP/Chief Operating Officer of Farm Journal Media and Chairman of the American Business Media (ABM) Agri-Council's Research Committee.
"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."
"Additionally, marketers selling products and services to the livestock market have a somewhat more negative view of the current economic environment for their customers," says Lynn Henderson, Publisher of Agri Marketing magazine. "Although prices received by livestock producers remain high by historical standards, so have their feed costs, creating substantial losses. Those losses, plus the ongoing drought in major livestock producing areas has led to some herd liquidations.
"The speculation is the higher crop prices will push planted acres up next year," Henderson continues. "With anything close to normal yields crop prices could fall substantially, bringing profitability back into the livestock sector.
The poll was conducted by Agri Marketing magazine and the ABM's Agri-Council and was sent to 226 executives of companies that develop and sell products to North American crop and livestock producers. A total of 85 (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:
*33% of the marketers believe business conditions for their company will be better 12 months from now while only 2% believe it will be worse.
*46% expect the general outlook for U.S. farmer and ranchers will be better 12 months from now while 8% expect it to be worse.
*41% expect to increase their marketing communications budget one year from now with another 62% expecting it will remain the same.
Confidence Index Results