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Farmers less optimistic about the future of the ag economy

Some farmers are less optimistic about the future of the ag economy, according to the latest Purdue University/CME Group Ag Economy Barometer.

Purdue’s Jim Mintert says the indices that make up the barometer – the Index of Current Conditions and the Index of Future Expectations – reflect uncertainty in the ag economy.

“The Index of Current Conditions basically held at its record level and if you think about what’s taking place in agriculture right now with the strength in commodity prices and strength in farm incomes that makes a lot of sense,” he says. “But people are exhibiting a little bit of unease about the future under the surface and I think that’s being reflected in the Index of Future Expectations.”

The overall Ag Economy Barometer fell to a reading of 167. The index of Current Conditions held steady at 199 and the Index of Future Expectations fell 10 points to 151.

He tells Brownfield weakening expectations appear to be related to concerns about several policy issues.

“There’s been a shift in attitudes since the election on things like environmental regulations. People are concerned environmental regulations faced by agriculture will become more restrictive in the next few years,” he says. “In October only 40 percent of the people felt that way, but in both December and January 83 percent felt that way.”

Farmers surveyed are also concerned that both estate and income taxes will increase over the next five years.

“Expectations of higher estate taxes back in October was 40 percent and now that’s up to 73 percent,” he says. “In October 35 percent of people surveyed said they expect higher income taxes in the next few years, but in between December and January that rose to about 75 percent.”

The monthly national survey of 400 agricultural producers was conducted January 18-22.

Audio: Jim Mintert