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FARMER SENTIMENT IN OCTOBER REBOUNDED AHEAD OF THE U.S. ELECTION


Source: Purdue University and CME Group news release

October provided a surprising pre-election bounce in farmer sentiment as the Purdue University-CME Group Ag Economy Barometer index climbed to 115, 27 points higher than in September. The biggest driver of the sentiment improvement was an increase in producers' confidence in the future, as the Future Expectations Index jumped 30 points to 124.

The Current Conditions Index also rose in October but by a smaller amount. With a reading of 95, the Current Conditions Index confirmed that farmers think economic conditions this year are worse than last year and weaker than during the barometer's base period of 2015-2016, which was in the early days of a multi-year downturn in the U.S. farm economy.

Producers this month expressed some optimism that economic conditions will improve and not precipitate an extended downturn in the farm economy.

The October barometer survey took place from October 14-18, 2024.

The overall improvement in farmer sentiment is better understood by examining responses to the individual questions used to generate the barometer. Much of the sentiment improvement was attributable to producers possessing a less pessimistic view of the U.S. agricultural economy.

For example, the percentage of producers who expect bad times for the U.S. agricultural economy in the upcoming year declined from 73% of respondents in September to 53% in October. Similarly, the percentage of producers who expect bad times for U.S. agriculture in the next 5 years fell from 48% to 33%.

Looking at a related question, fewer producers this month said they expect their farm's financial condition to worsen over the next 12 months, with just 23% looking for conditions to worsen compared to 38% who felt that way in September.

However, despite the improvement in the main barometer indices, it's clear producers financial situation deteriorated in 2024. For example, over half (56%) of the October respondents said their farm's financial condition was worse than a year earlier. That was lower than reported in September but matches the response to this question in August.

Wrapping Up

The October Ag Economy Barometer survey revealed a surprising rebound in U.S. farmer's sentiment. In a survey taken just three weeks before the U.S. presidential election, the Future Expectations Index rose 30 points compared to a month earlier. The future expectations index upturn was correlated with improvements in farmers' outlook for farmland values and a somewhat more optimistic view regarding investments in their farm operations.

Producers still have reservations about current economic conditions on their farms since, despite this month's rise, the Current Conditions Index remains below 100, which indicates farmers still have a weak view of their current situation. Comments provided by survey respondents this month indicate that politics and policy are top of mind for many U.S. farmers.

The November barometer survey, to be conducted one week following the presidential election, will provide an update on how the election's outcome affects producers' outlook.

To read the entire report click here.



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