WEST LAFAYETTE, Ind. and
CHICAGO, Feb. 6, 2018 /PRNewswire/ -- Agricultural
producers said in January that they were more optimistic about the
agricultural economy than a month prior, according to the
Purdue University/CME Group Ag Economy
Barometer.
The January barometer read 135, up 9 points from December's 126.
The uptick was driven by increases in both the Index of Current
Conditions, which climbed 5 points to 144, and the Index of Future
Expectations, which climbed 11 points to 131. This marks the
largest one-month improvement in future expectations since
January 2017.
The barometer is based on a monthly survey of 400 agricultural
producers from across the U.S. Each month, survey respondents are
asked whether their farm operations are financially better off,
worse off, or about the same. In January, 43 percent said their
farms were financially worse off than a year ago, while 14 percent
said their farms were financially better off.
According to James Mintert,
director of Purdue University's Center
for Commercial Agriculture and the barometer's principal
investigator, the 43 percent number is significant.
"To help put January's responses in perspective, the percentage
of farmers who felt their operations were financially worse off
reached a high of 81 in August 2016,"
he said. "Since April 2017, the share
reporting that their farms were financially worse off has
consistently fallen below 50 percent. The reduction has been an
important driver of the ongoing improvement in the Index of Current
Conditions."
Another potential driver of producer sentiment in January was
the passage of the Tax Cuts and Jobs Act of 2017. Surveyed
producers were asked to rate the likely impact on their farming
operations, as well as their families' tax burdens. Nearly half of
all producers said they expect the tax bill to be beneficial to
their operations. Conversely, 19 percent said they expect the tax
bill to have a negative impact on their farming operations. The
remaining 35 percent gave a neutral response.
When it came to producers' expectations for their families' tax
burdens, 43 percent said they expect a decline, 18 percent expect
an increase, and 40 percent said they expect their families' tax
burdens to stay about the same.
"It's possible the 40 percent of respondents expecting no
changes in their taxes and the 35 percent who provided a neutral
rating could reflect uncertainty regarding the specific content of
the tax bill and the fact that IRS regulations implementing the tax
bill have yet to be issued," Mintert said.
Each quarter, a parallel survey gauges the sentiment of 100
agricultural thought leaders. Sentiment among thought leaders
declined sharply from October's survey, falling from 152 to 127.
The decline in agricultural thought leaders' sentiment was driven
in part by their more negative perspective on current conditions
than they had last fall.
Read the full January Ag Economy Barometer and Ag Thought
Leaders Survey report at purdue.edu/agbarometer.
The quarterly Ag Economy Barometer webinar will be Feb. 8 at 1:30 p.m.
Barometer researchers will discuss the drivers of sentiment.
Register for the free webinar at
https://ag.purdue.edu/commercialag/ageconomybarometer/update/.
The Ag Economy Barometer, Index of Current Conditions and Index
of Future Expectations are available on the Bloomberg Terminal
under the following ticker symbols: AGECBARO, AGECCURC and
AGECFTEX.
About the Purdue University
Center for Commercial Agriculture
The Center for Commercial Agriculture was founded in 2011 to
provide professional development and educational programs for
farmers. Housed within Purdue
University's Department of Agricultural Economics, the
center's faculty and staff develop and execute research and
educational programs that address the different needs of managing
in today's business environment.
About CME Group
As the world's leading and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) is where the world comes to manage
risk. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes, including
futures and options based on interest rates, equity
indexes, foreign exchange, energy, agricultural
products and metals. Around the world, CME Group
brings buyers and sellers together through its CME Globex®
electronic trading platform. CME Group also operates one of
the world's leading central counterparty clearing providers
through CME Clearing, which offers clearing and settlement
services across asset classes for exchange-traded and
over-the-counter derivatives. CME Group products and services
ensure that businesses around the world can effectively manage risk
and achieve growth.
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Related website:
Purdue University Center for Commercial
Agriculture: http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: The Purdue/CME
Group Ag Economy Barometer climbed 9 points to 135 in January with
increases in both the Current Conditions and Future Expectations
indices. (Purdue/CME Group Ag Economy
Barometer/David Widmar)
A publication-quality photo is available at
https://news.uns.purdue.edu/images/2018/mintert-january.jpg.
CME-G
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SOURCE CME Group