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Mixed Signals of Optimism
Growers continue to have a positive current outlook, while agribusiness owners are concerned about the future. That's the conclusion of the recent DTN/The Progressive Farmer Agriculture Confidence Index and the companion DTN/The Progressive Farmer Agribusiness Confidence Index (together known as the ACI).
The current ACI for farmers is 111.8, up from 105.8 in spring 2022 and from 98.5 in December 2021. The overall index for agribusiness is a significantly pessimistic 67.7, well below the 97.8 of December 2021 and below the multiyear average, which is typically near the neutral score of 100.
Some 500 farmers and ranchers, and 100 agribusinesses were surveyed via telephone. Respondents are asked questions about their mindset on current economic and financial conditions compared to a year ago, and their best-guess thoughts on conditions a year from now. Present-condition and future-expectation scores are combined to create the overall ACI.
DTN Editor-in-Chief Greg Horstmeier, who oversees the Index, explains that results gathered in late November and early December showed growers with a highly optimistic present condition score of 162.1, up significantly from spring yet down a bit from the 169.8 of a year ago. Numbers above 100 indicate optimism; numbers below 100 reflect pessimism.
Looking ahead, farmers are worried about the future. Survey responses put their future expectations score at 84.8, the lowest since December 2021, when it was an all-time record low of 60.1. The 109-point swing (169.8 present condition vs. 60.1 future) is likely driven by persistent strong commodity prices today coupled with concerns about when the markets might turn bearish, along with higher input and fuel costs to grow crops, Horstmeier points out.
Midwest producers tend to be the most optimistic, with an overall index of 124.5. Southeastern growers had the lowest score of 86, and in the Southwest, 96.4. Crop farmers surveyed had a more optimistic outlook than livestock producers, with an overall index of 119.6 vs. 95.4. Future expectations results again show crop producers (89.3) more optimistic than livestock owners (75.6).
Farmers continue to focus on input costs, but their anxiety levels have lowered somewhat from a year ago. Only 32% of those surveyed said they would likely face higher costs to secure fertilizers and other inputs for the 2023 crop year. An almost identical 32.2% indicated they would have needed supplies at normal prices. And, only 19% of farmers surveyed feared input costs would significantly hurt profits, while 17% were concerned they would not have all the inputs they needed, Horstmeier continues.
For agribusiness owners, the ACI of 52.8 shows they are the most pessimistic about the future since the 70.9 of March 2016. That low score was fueled by commodity prices being well off their 2012-13 highs and the uncertainty of a presidential election year. In the most recent ACI, some 84% of agribusiness owners expected profitability to be the same or worse a year from now compared to current conditions.
February 2023 Progressive Farmer Special Issue: Art of Planting
Those picket-row-fence corn stands don't happen by accident. It all begins months earlier during the cold winter days under the bright lights of the shop. It's here where the planter can be disassembled, inspected, adjusted, repaired and reassembled with new parts and components.
Our February 2023 special issue of Progressive Farmer themed as the "Art of Planting" showcases three growers who consistently place in the NCGA National Corn Yield Contest. They share the steps they take to prepare their planters for the field to achieve winning yields. In addition, you'll find stories on how planters are being adapted with sensors to place seed in the best soil conditions and to apply various inputs in-furrow. Finally, we've put together a roundup of new planter offerings from some of the major equipment manufacturers.
-- Write Gregg Hillyer, 2204 Lakeshore Dr., Suite 415, Birmingham, AL 35209, email email@example.com, or follow Gregg on Twitter @GreggHillyer
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