Farmer sentiment jumped again in November as the Purdue University-CME Group Ag Economy Barometer climbed 30 points to 145. Both the Current Conditions and Future Expectations indices increased in November, with the biggest improvement taking place in future expectations.
"Following the 2024 presidential election, farmers’ perspectives on potential policy shifts showed significant changes," JP Morgan analyst Tami Zakaria said in a note to investors.
The Future Expectations Index increased 37 points to 161, while the Current Conditions Index rose to 113, 18 points above October’s reading. November’s sentiment improvement pushed the barometer to its highest level since May 2021, with expectations for the future also reaching their highest level since April 2021. Some of the reasons behind the improvement in farmer sentiment include expectations for a future regulatory and tax environment for the agricultural sector that is more favorable than expected prior to the November elections. The November barometer survey took place from November 11-15, 2024.
Responses to the base questions used to compute the Ag Economy Barometer index were nearly all more positive in November than in October. One-third of November’s respondents said they expect their operation to be better off financially a year from now, compared to 19% who felt that way in October. Thirty-four percent of farmers in November said they expect good times financially for the U.S. agricultural sector in the next 12 months compared to just 15% of respondents in October. When asked to look ahead five years, over half (52%) of November’s respondents said they expect U.S. agriculture to experience widespread good times compared to 34% who felt that way in October. The increase in optimism spread to farmer’s investment outlook, with 22% of November respondents reporting it is a good time to make large investments compared to 15% of farmers surveyed who felt that way in October.
The sentiment improvement extended to farmers’ perspectives on capital investments, with the Farm Capital Investment Index rising 13 points to 55, which is the index’s highest reading since May 2021. The shift in investment sentiment was motivated in part by expectations for better financial performance in 2025 compared to 2024. Each month, the barometer survey asks respondents about their expectations for their farm’s financial performance in the upcoming year. For the second month in a row, the percentage of producers who expect better times in the upcoming year rose. In November, 25% of respondents said they expect better times next year compared to 16% who felt that way in October. The shift in perspective boosted the Farm Financial Performance Index to a reading of 106, 16 points higher than October and 38 points above September’s index.
Zakaria noted that In November, only 9% of respondents expected a more restrictive regulatory environment, compared with 41% in October. Meanwhile, 55% anticipated less restrictive regulations in November, up from just 10% in October. In November, 55% of respondents expected income tax rates to remain the same in the upcoming year, compared with a smaller shift observed in October.
Additionally, she highlighted that 57% of respondents in November believed estate tax rates would remain unchanged over the next five years, relative to 28% in November 2020. Meanwhile, 42% of respondents in November said they think it is either “likely” or “very likely” that U.S. agriculture is at risk of a “Trade War” that results in a significant decrease in U.S. agricultural exports.
