View from the Cab: Rising Optimism
Since 2018 started with a polar plunge in temperatures and enough wintry weather to get anyone down, we need to start looking on the bright side.
A January 2 news release about farmer confidence caught my attention as I was browsing through my e-mail inbox on a cold, wintry Central Illinois morning recently.
The recent ag confidence survey from DTN/The Progressive Farmer indicates rising farmer optimism. These feelings come despite signs of lower livestock prices and flat grain prices. The November survey of the Agricultural Confidence Index resulted in a score of 113. This is up nine points from August and 15 points from a year ago. Index levels above 100 are considered optimistic and those less than 100 are viewed as a pessimistic attitude.
“Each survey asks a series of financial and economic questions to create two scores – one for how farmers rate their present situation while the second score reveals attitudes about future expectations,” explained Greg D. Horstmeier, DTN editor-in-chief. “Those two scores combined create the overall Agricultural Confidence Index.”
Farm incomes and financial conditions may be flat to downward and farm balance sheets haven’t improved much from where they were a year ago, yet many remain hopeful for a better future. Farmers have found ways to cut costs by shifting to more soybean acres, backing away from traits and even moving to more non-GMO crops in order to take advantage of price premiums.
It appears one of the largest expense items on many farms has nothing to do with directly raising crops or livestock. This would be health care premiums under the Affordable Care Act, also known as Obamacare. In some cases, the costs exceed crop insurance premiums. A continued effort to repeal ACA is seen as a positive sign according to some farmers who were surveyed.
After three consecutive years of decline, farm profits are expected to be relatively stable. This is from November figures provided by the USDA’s Economic Research Service. Let’s hope this stability continues well into 2018 and beyond.
(The View from the Cab blog is powered each week by Petersen Motors of Fairbury)