Agriculture Confidence Index - Farmers Look to Future
OMAHA (DTN) -- Farmer attitudes are a mixed bag as summer turns to fall and as election-year divisiveness and the ever-present coronavirus pandemic add to the tension of what harvest will bring. The latest DTN/The Progressive Farmer Agriculture Confidence Index shows farmers have a record-low attitude about their current plight but show strong optimism for the future.
The latest survey, conducted Aug. 6-14, also shows some potential waning in support for the Trump administration.
The overall Agriculture Confidence Index rose to a neutral 94.3, up 27 points from the record pessimistic levels of April. But that rise has more to do with optimism for the future than for where farmers find themselves today.
Farmers responding to the DTN/Progressive Farmer telephone survey answer a series of financial and income questions that compare the present to how they expect conditions to be in the coming year. A score is given to rate both their "present situation" and their "future expectations." Those numbers are combined to create the overall Agriculture Confidence Index.
Numbers above the baseline of 100 indicate optimism; the higher the number, the higher that optimism. Scores below 100 are considered pessimistic.
LARGE DIFFERENCE IN PRESENT VERSUS FUTURE
The current survey shows a large difference in present situation versus future expectations scores. For the overall group, the present situation rating of 46.9 is a record low, down 8.5 points from the previous record low in April. However, farmers' future expectations received a score of 120.1, solidly into the optimistic range and the main factor boosting the overall Index. In April, that future score was 73.
The DTN/The Progressive Farmer Agriculture Confidence Index is conducted three times a year: early spring before planting, late summer just prior to harvest, and just before the end of the year, during tax preparation time. The telephone survey is conducted with at least 500 farmers who identify as being actively engaged in the farm operation.
LEVEL OF SUPPORT FOR TRUMP ADMINISTRATION
This is the third ACI survey in which DTN examined farmer support for the current president. Asked how they would vote if the election was held now, 71% said they would likely vote to retain the Trump administration. While a solid majority, that is significantly lower than the 89% of farmers who said they would vote that way in the April 2020 DTN survey.
That change in support also showed up in questions regarding the current pandemic. In both the spring and pre-harvest ACI surveys, farmers were asked if they were satisfied with the way the Trump administration was handling the coronavirus crisis. In August, only 43% said they were satisfied, while 20% said they were not satisfied and 37% said they were undecided. In April, as the pandemic was just beginning to take a hold and the administration was downplaying its severity, 84% said they were satisfied with the way the pandemic was being handled, only 9% said they were dissatisfied and a smaller amount, 6.7%, said they were unsure.
The reason for that dissatisfaction likely has many prongs. Social media commentary from rural America seems divided between those concerned with the rise in COVID-19 cases and the lack of answers to stop that rise, while others feel the issue has been overblown and control methods such as lockdowns and social distancing have overly hurt the economy.
HEALTH, ECONOMY TOP CONCERNS
Farmers continue to be most concerned about the health of those close to them, and the U.S. economy in general, echoing the split opinion on how the pandemic has been handled. In the latest survey, 42% of farmers said the U.S. economy was their highest concern; 40% said they were most concerned for the health of family, friends and employees. Eleven percent said they had no concerns about the global health issue.
In April, 47% of farmers surveyed put health concerns first, 32% were worried about the overall economy, while only 3% had little concern about the pandemic.
REGIONAL, COMMODITY DIFFERENCES
Turning to regions, Midwestern farmers were slightly more pessimistic, with an ACI of 80, up 10 points from April. Those farmers also turned in a record-low present situation rating of 31.9, while their future expectations were 113.9, a level similar to December of 2017. Southeastern farmers scored in the middle in terms of ratings, with an ACI of 91.7, while the Southwest took the strongest turn to the positive, with an overall ACI of 122.3, a 56-point jump from the April 2020 score. Southwestern farmers also had the highest current and future scores, with farmers there giving a 78.3 to their present situation, nearly flat with spring 2020 feelings, while future expectations jumped a whopping 79 points to 142.5, levels not seen since spring of 2019.
Crop producers were more pessimistic than those who said most of their income came from livestock. The overall ACI was 87.5 for crop producers, up slightly from April but well below the 106 posted by livestock producers. That reflected both a lower opinion of present conditions (39.3 for crop farmers, 65.3 for livestock) and slightly less optimism for the future (115.9 for crop, 124.2 for livestock producers).
AGRIBUSINESS LEVELS FALL SLIGHTLY
In addition to the survey of farmers, DTN/Progressive Farmer also conducts a similar query of at least 100 ag retailers for the DTN/The Progressive Farmer Agribusiness Index. The overall Index for August 2020 is 97.9, down slightly from April's 104 and closer to the 100 of December 2019.
Agribusinesses rated current conditions a slightly pessimistic 98.3, up from April's 85.4, but they feel less optimistic about the future. That future expectations rating for agribusiness owners slipped to 97.4 versus the 118 of April.
The agribusiness survey was conducted Aug. 7-12.
The next DTN/The Progressive Farmer Agriculture Confidence Index will be conducted in late November, following the 2020 presidential election. Progressive Farmer is also conducting its Pulse of Rural America survey, with polling experts Zogby Analytics, which will dig deeper into farmer voting plans and concerns. This is the third time the magazine has conducted that poll ahead of a presidential election. Results of that poll are scheduled for the November 2020 issue of the magazine.