Agriculture Confidence Index

OMAHA (DTN) -- Farmer attitudes have hit historic lows, driven down by relatively flat commodity prices and falling global economic conditions due to the novel coronavirus pandemic. The DTN/The Progressive Farmer Agriculture Confidence Index is a pessimistic 67, a drop of 97 points from December 2019 and down 43 points from spring 2019.

The previous record Index low was 71.9 in August 2016, as then-falling crop prices melded with a divisive presidential election.

In the latest survey, record or near-record pessimism reigned across the farm spectrum, regardless of enterprises grown, income level, or region.

The DTN/The Progressive Farmer Agriculture Confidence Index is conducted three times a year: early spring before planting, late summer just prior to harvest, and just before the end of the year, during tax preparation time. The telephone survey is conducted with at least 500 farmers who identify as being actively engaged in the farm operation.

The current index survey took place in early April, just as social distancing and other pandemic precautions were being implemented.

Farmers responding to the telephone survey answered a series of financial and income questions that compare the present to how they expect conditions to be in the coming year. A score is given to rate their "present situation" and to their "future expectations." Those numbers are combined to create the overall Agriculture Confidence Index.

Numbers above the baseline of 100 indicate optimism, the higher the number the higher that optimism. Scores below 100 are considered pessimistic.

The current survey produced a current expectation score of 55, with a future expectations level of a still-pessimistic 73.

The last time all three numbers -- the overall index, current situation and future expectation -- dipped below 100 was the previous record-low period of August 2016.

NO SPRING ENTHUSIASM

It's especially significant that these lows come during a spring survey, when future expectation levels especially tend to usually be higher as farmers prepare for the U.S. cropping season. Levels in 2019, for example, were 110 for the overall index, 63 for current conditions, yet 136 for future expectations.

Midwest farmers showed the most pessimism currently, yet the most optimism for the future. Their future expectations score was a near-neutral 92, though that was offset by a dismal current conditions level of 38, the lowest score in the ACI history. Southeastern farmers scored their present conditions at 89, and felt worse about the future, scoring a 56. Southwestern producers were similar, with a present score of 72 and a slightly lower future expectations level of 64.

All those regional scores were well off the highly optimistic levels seen in the various regions just before the December 2019 holiday season.

AGRIBUSINESSES MORE OPTIMISTIC

In addition to the survey of farmers, DTN/The Progressive Farmer also conducts a similar query of at least 100 ag retailers for the DTN/The Progressive Farmer Agribusiness Index. The overall Index for spring 2020 is 104, up slightly from the 100 of December 2019 and the 103 of a year ago. Agribusinesses rated current conditions a slightly pessimistic 85, with a future expectations level of 118. That latter number was also above December (100) and year-ago (107) levels, a sign that despite the issues of the pandemic, ag retailers don't expect huge drops in revenue for the coming crop year.

SUPPORT FOR TRUMP CONTINUES

Along with standard agriculture confidence questions, DTN asked farmers about their political views, as well as their concerns around the pandemic. Depending on income level, between 96% and 98% of farmers surveyed said they planned to vote in the upcoming presidential election. About 90% said if the election was held this spring, they would vote for the current Trump administration. That's a significant 15-point increase from farmer responses in December 2019. Approximately 85% of farmers surveyed in April said they were satisfied with the administration's handling of the coronavirus issue. Those questions were not asked in surveys prior to December 2019.

When asked about their greatest concerns about the pandemic, some 45% said they were most concerned for the health of family and friends. A third of farmers said the overall economy was their greatest concern, while around 15% said they were most concerned about commodity prices. Farmers with incomes of $100,000-$249,000 showed a higher level of concern for commodity prices; farmers with incomes of $1 million and above were slightly more concerned with global economic issues.

The next DTN/The Progressive Farmer Agriculture Confidence Index survey will be conducted just prior to the corn and soybean harvest.

Greg D. Horstmeier can be reached at greg.horstmeier@dtn.com

Follow him on Twitter @greghorstmeier

(ES/AG)

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