Agriculture Confidence Index Results
Farmers Seem to Make the Best of a Temporary Situation
OMAHA (DTN) -- There's no time like the present, so farmers seem to say in their response to the spring edition of the DTN/The Progressive Farmer Agriculture Confidence Index. The overall index is 124, solidly in optimistic territory and up 30 points from spring 2020, but down 22 points from the December survey.
The drop since winter seems counterintuitive, given that corn and soybean prices continue to be strong, and vaccinations for the novel coronavirus bring the United States closer to broad immunity.
The reason for that drop seems to be concern for the future.
The DTN/The Progressive Farmer Agriculture Confidence Index is created by melding responses to how farmers feel about their present situation and what they expect a year from now. Farmers responding to the telephone survey answer a series of financial and income questions that compare those present and future conditions. This spring, 500 farmers were surveyed March 17-31.
Index numbers above the baseline of 100 indicate optimism -- the higher the number, the higher that optimism. Scores below 100 are considered pessimistic.
During the late-March 2021 period, farmers felt very optimistic about current conditions. The present situation score was 186, up from December's positive 177 and a whopping 131 points above the trade-and-pandemic-rattled spring of 2020.
However, the future expectations score is another story. Farmers rated their thoughts for the year ahead at a slightly pessimistic 90, down 39 points from December and up only slightly from the 73 of a year ago.
WHY THE PESSIMISM?
What are farmers pessimistic about? It's highly likely drought is on many growers' minds as they head to spring fieldwork. DTN long-range weather forecasts have for months pointed to a La Nina condition through the 2021 growing season. La Nina typically brings hotter, drier conditions to much of the central and western Corn Belt. Western and Northern Plains states are already showing ratings ranging from abnormally dry to severe and extreme drought, according to the NOAA drought monitor and backed up by DTN soil moisture data.
DTN Senior Ag Meteorologist Bryce Anderson said current DTN forecasts for July-to-September are for higher-than-normal temperatures for most of the country, with lower-than-normal rainfall for farming areas of north Illinois and into the Dakotas and west into the Plains states.
Areas east of the Mississippi River and central and eastern Appalachia will have normal to slightly above-normal precipitation, with expected moisture levels increasing into above-normal range in the Delmarva Peninsula.
POLITICS WEIGHS ON MINDS
Other issues likely weighing on farmers' minds are related to politics, specifically what will come of the infrastructure and climate change policies of the new Biden administration.
Farmers are often critical of the climate-change focus of Democratic administrations. They applauded when former President Donald Trump pulled the U.S. out of the Paris climate accord in 2017, an action President Joe Biden reversed within days of his inauguration.
While climate change policies typically involved programs to sequester carbon, something sustainable farming practices such as no-till can foster, farmers as a whole remain skeptical of climate science and even more so about potential regulations that could come with meeting world greenhouse gas goals. Regionally, farmers responding to the March survey echoed the national confidence levels.
RESPONSES BY REGION AND COMMODITY
Midwest farmers were slightly more positive than the overall average, with a confidence index of 139. That index came from a present conditions score of 196 and a future expectations score of 98.
Southwest farmers were the most pessimistic, with an ACI of a moderate 101, based on a current situation score of 157 and a future expectations level at a pessimistic 77.
While conducting the survey, DTN pollsters asked whether the respondents consider themselves primarily a crop operation or primarily a livestock enterprise. Those who identified as crop farmers had a confidence index of 128, down 28 from December, but up 62 from 2020. Their present condition score was the highest of any segment, 193, up 18 from December, with their future expectations coming in at the same 90 as the broader group. Livestock producers had an index of 116, a present condition score of 175 and a future expectations score of 89.
AGRIBUSINESSES UNUSUALLY OPTIMISTIC
A key feature of the current mood in agriculture is the difference between farmers and the agribusinesses that serve them. In addition to the farmer index, DTN surveys 100 agribusinesses to create the DTN/The Progressive Farmer Agribusiness Confidence Index.
The overall agribusiness index is 123, a record, up 13 points from December and 19 points from spring 2020. The previous record, 119, was in spring 2011 when farmers were on a buying spree.
Agribusinesses also are much more optimistic about the future, turning in a 122 for expectations a year from now, also a record for the Index, which is now in its 12th year. Farm equipment companies have been reporting increased sales, which along with higher fertilizer prices (see DTN's weekly fertilizer price reports on our subscription products), and lively sales of seed and other inputs are likely fueling the agribusiness optimism.
PLANTING PLANS STEADY
In addition to the standard ACI questions this spring, pollsters asked farmers about some topical issues, including planting plans and issues around broadband internet access. On planting, 76% of respondents said they planned their usual crop mix, with 9% saying they'd plant more corn; 6% more soybeans, and around 9% saying they would be increasing alternative crops.
When asked about internet access, 60% of respondents said they had adequate broadband to conduct business and family operations. Around 15% said access was usually adequate, with 11% reporting access that rarely met needs and 15% reporting unreliable access. That 30-plus percent of farmers with less-than-perfect internet access matches other recent surveys reporting on rural broadband.
DTN and Progressive Farmer conduct the index three times each year: early spring before planting, late summer just prior to harvest, and just before the end of the year, during tax preparation time. The next survey will take place in August.
Greg D. Horstmeier can be reached at firstname.lastname@example.org
Follow him on Twitter @greghorstmeier
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