Farmer Sentiment in October Rebounded Ahead of the U.S. Election

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.

The last question on each month’s survey provides respondents with an open-ended question asking them to share what’s on their minds. Figure 3 is a word cloud representation of responses received in the October survey. Unsurprisingly, politics was mentioned quite often, with the elections looming just a few weeks into the future. Perhaps more importantly, it’s clear that many producers were thinking about possible policy shifts that could impact their farms and the agricultural economy. Mentions of regulation, environment, and taxes were featured prominently, along with concerns about prices.  When asked explicitly about their biggest concerns for the upcoming year, producers still point to higher input costs and lower output prices as their biggest concerns. The trend of fewer producers citing interest rates as a top concern continued this month. Just 15% of producers, down from as much as 26% of producers in late 2023, chose interest rates as one of their biggest concerns in October.