One year ago, Purdue and CME Group launched the Ag Economy Barometer, the first economic indicator to help gauge the monthly outlook of the U.S. farm economy. Since its inception, the barometer has measured farmers' sentiment through market-moving events -- such as Brexit, the U.S. presidential election and key agricultural reports -- and continues to be an important tool for taking the temperature of the nation's agricultural sector.
Each month, the barometer measures the confidence of 400 food producers regarding the farm economy and key economic drivers, resulting in a barometer reading that represents sentiment. The barometer reading is published on the first Tuesday of each month, indicating whether sentiment has improved or declined month over month or above or below the baseline score of 100.
Since Purdue and CME Group started fielding this research, the barometer has seen a significant rise in producer optimism from 116 to 130 points, due to unexpected factors beyond commodity prices. Sentiment began rising steadily after the U.S. presidential election in November and reached an all-time peak of 153 points in January, when Donald Trump took office.
"Over the last year, we learned that producer expectations are a driving force of sentiment, not solely day-to-day changes in commodity prices or even overall profitability," says Jim Mintert, director of Purdue's Center for Commercial Agriculture and principal investigator for the barometer.
"While near-term economic conditions in agriculture barely changed around the election, producers' attitudes improved with expectations of less regulation and tax reform down the line."
"Agriculture is a key component of the global economy, so understanding the health of the farming community is critical to get the full picture," says Fred Seamon, CME Group executive director of commodity research & product development.
"We're pleased that the barometer is providing vital insight into an industry on which consumers so heavily rely, and will continue to do so."
Results for the Ag Economy Barometer are tabulated and published on the first Tuesday of each month by Purdue University. To learn more about the barometer, survey methodology or to view the most recent results, visit www.purdue.edu/agbarometer