DTN/The Progressive Farmer Releases Agriculture and Agribusiness Confidence Indexes
OMAHA, Neb. – Farmers are still optimistic about the overall state of the agriculture industry but slightly less than a year ago, according to the December 2013 DTN/The Progressive Farmer Agriculture and Agribusiness Confidence Index measuring current and future sentiment of the agriculture sector.
The composite Agriculture Confidence Index, which surveyed 500 randomly selected producers about their present and future situations, came in at 105.5, down from 109.1 in December 2012. A value of 100 is considered neutral. Higher numerical values indicate optimism, and values lower than 100 indicate pessimism.
The composite index is divided into two time frames, present conditions and future expectations. The farmers’ rating for the present conditions was 123.5 and 93.6 for future expectations. In December 2012, the present situation index was 137.2 and future expectations index was 90.5, revealing a significant decline in present sentiments and moderate increase for the future outlook over the past 12 months. However, future expectations did fall from 96.2 in September.
According to the survey, the ratings slip throughout the year can be attributed to increased crop production input costs and decreased farm incomes. The farmers’ index for current conditions slipped throughout 2013 from 135.3 in march to 128.8 in September before closing out the year at 120.7. Most of the slide came from crop producers, while livestock producers’ attitudes held steady.
There was a noticeable drop in the composite index with Midwest farmers, where the index held steady at 109 the last three surveys but fell to 103.4 in December. The composite index did rise by one point with Southwest farmers.
Agribusiness Confidence Index
The December 2013 Agribusiness Confidence Index, which measures the sentiments of 100 agribusinesses – including elevators, ag retailers, livestock companies, food product manufacturers, ag services, bankers, cotton buyers and seed companies from across 26 states – checked in at 102.5. Climbing marginally from a composite index of 100.7 in December 2012, the present outlook jumped from 116.2 to 120.7, and future outlook remained consistent from 90.1 to 90.2.
Despite more positive perspectives from agribusinesses on the present situation, many are uncertain about future stakes. Although the index demonstrates that agribusinesses routinely perform better than projected, most have been waiting for more than two years for the up cycle to fall. This uncertainty is expected to continue, with the Farm Bill still in negotiation and no solutions coming out of Washington in the near future.