A check of farmer confidence heading into planting season

Earlier this week, DTN/The Progressive Farmer released the results of the latest Ag Producer’s Confidence Survey, which checks the pulse of farmers and how they feel about the agricultural economy. Over 500 livestock and crop producers from all over the U.S. take part in the survey, which asks a series of 5 questions about current feelings about current income and inputs and how they feel those same issues will look 12 months down the road. The survey uses a baseline number of 100 for neutrality. Values above 100 indicate optimism, whereas values below signify pessimism.

Overall, Producers viewed their present conditions as positive with a score of 128.1, a drop from 135.3 last March but up slightly from 123.5 in December. Producers’ future expectations dropped to 92.8, a decrease of just 0.8 since December but up from 88.2 in March 2013.

image003“The number for livestock producer’s overall outlook came in at 116.4, which is two-tenths shy of the all-time high for that category,” said Katie Micik, DTN/The Progressive Farmer Markets Editor. “The present situation number is 145.1 which was the highest number recorded for present situation an any category for farmers and it makes some sense when you look at where feed costs are today.”

The expectations for the year ahead shared a different view, coming in at 97.3, a pessimistic number by the surveys methodology but almost 10 points higher than a year ago. Micik noted that over 4 years of doing the survey, almost everyone in every category is pessimistic about the year ahead, many times those feelings are based on weather.

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Crop producers’ confidence dropped to the lowest level in four years to 102.7, down from 104.3 in December and from 106.8 last March. Crop producers’ expectations for the coming year fell to 90.7 from 93.4 in December but were up from 87.9 in March 2013. Their feelings on their present situation remained unchanged at 120.8 since December, but declined from 135.2 in March 2013.

“Much of the crop producers’ attitudes about their current situation can be attributed to lower corn prices from the previous year, although current prices are at a level higher than what analysts had anticipated at this point for the year,” Micik said.

image007While producers’ attitudes remained mixed, agribusinesses were more confident about the industry, according to the DTN/PF Agribusiness Confidence Index, which is similar to the producer index and measured the sentiments of 100 agribusinesses between Feb. 28 and March 5. Agribusiness confidence climbed to 107.3 in March from 102.5 at the end of 2013, due in large part to stabilized crop prices. Seventy-two percent of agribusinesses surveyed felt good about their current sales, marking an increase of 14.6% since December and a 12% increase since last March. However, 76% of those agribusinesses surveyed believed sales expectations over the next 12 months will remain the same or get worse.

“Fertilizer retailers are somewhat concerned that reductions in corn acres could impact fertilizer sales and profits,” Micik said. “With incomes narrowing, producers may turn to higher-priced soybeans over corn.”

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