Farmer Sentiment improved in February with the Purdue University-CME Group Ag Economy Barometer reaching 152, up 11 points from the previous month. Michael Langemeier and James Mintert with Purdue’s Center for Commercial Agriculture note that an improvement in the current situation on U.S. farms was the primary driver behind the stronger sentiment among producers, as the Current Conditions Index reading of 137 was 28 points above January’s reading. The Future Expectation Index, changed just slightly at up 3 points in February to 159.
“This month’s rise in the Current Conditions Index capped a long climb from the doldrums of late summer and early fall 2024 when the index bottomed out at a reading of 76,” Langemeier and Mintert say. “A sharp crop price recovery in the last several months, which was augmented by expectations for receipt of disaster payments authorized by Congress, combined with strength in the U.S. livestock sector, contributed to producers’ improved appraisal of conditions on their farms and in the U.S. agricultural sector. Despite the big improvement in the Current Conditions Index, the February Future Expectations Index was still 22 points higher than the current index, suggesting that farmers expect conditions to improve further.”
JP Morgan’s Tami Zakaria notes that producers are “more optimistic on their medium-term growth algorithm.” Each February, the survey asks producers about their expected annual growth rate for the next five years. Zakaria highlights that this year, 50% of respondents indicated they have "no plans to grow" (37%) or "plan to exit or retire" (13%), slightly down from 52% last year. Since 2016, these categories have fluctuated between 43% and 61%.
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