Farmer sentiment drifted lower in December as the Purdue University/CME Group Ag Economy Barometer dropped nine points to a reading of 136, said Michael Langemeier, Purdue agricultural economist, in a release.
The decline was driven by producers’ weaker perspective on current conditions in US agriculture and their farms, with the Index of Current Conditions falling 13 points to 100, Langemeier said. Although the Current Conditions Index declined, it remained 24 points above its September low and five points higher than in October.
NEARBY EXPECTATIONS FALL
The Index of Future Expectations fell eight points to 153, remaining 59 points above its September low and 29 points higher than the October reading, the release said.
While sentiment dipped this month, it’s clear that much of the post-election optimism about future conditions was holding, he said. Producers’ optimism about the future seems to stem largely from their expectations for a more favorable policy environment over the next five years.
Farmers’ views on the current and long-term outlooks for agriculture showed some differences in December, Langemeier said. While sentiment regarding the current situation and the one-year outlook was more cautious than in November, expectations for the agricultural sector over the next five years were notably more positive.
FUTURE EXPECTATIONS RISE
The percentage of producers anticipating widespread good times in US agriculture over the next five years increased to 57%, from 52% in November and 34% in October, the survey revealed. This optimism extended across the crop and livestock sectors, with four- and five-point increases, respectively.
In contrast, views on the near-term outlook were less favorable, Langemeier said. When asked about financial conditions on their farms compared with a year ago, 57% reported worse conditions in December, up from 51% in November.
Similarly, 51% of farmers expressed concern about the US agricultural economy over the next 12 months, an increase from 40% in November, the release said.
CAPITAL INVESTMENT INDEX FALLS
Following a 13-point increase in November’s survey, the Farm Capital Investment Index fell seven points to a reading of 48, the release said. The weakening in investment sentiment was reflected in a lower percentage of farmers who believed it is a good time to invest, dropping to 17% from 22% in November.
At the same time, the proportion of producers who viewed it as a bad time to invest increased slightly to 69%, up from 67%, Langemeier said. This dip in investment sentiment mirrored the decline in the Farm Financial Performance Index, which fell eight points in December to 98.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $197.16 per cwt to $198.56, compared with last week’s range of $191.11 to $197.07 per cwt. FOB dressed steers, and heifers went for $306.40 per cwt to $312.78, compared with $301.97 to $310.00.
The USDA choice cutout Tuesday was down $1.31 per cwt at $325.79 while select was up $2.10 at $305.43. The choice/select spread narrowed to $20.36 from $23.77 with 133 loads of fabricated product and 24 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $336.65 per cwt, and 50% beef was $93.65.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.25 to $1.38 a bushel over the Mar corn contract, which settled at $4.58, up $0.00 1/4.
The CME Feeder Cattle Index for the seven days ended Monday was $272.29 per cwt, up $3.66. This compares with Tuesday’s Jan contract settlement of $268.40, up $2.10.