Producer optimism shot up in January on the backs of expected business with China after the two countries signed a “phase one” trade deal.
According to the Ag Economy Barometer from Purdue and the CME Group, a reading of producer sentiment jumped 17 points in January. “Virtually all of the rise in this month’s barometer was attributable to a sharp rise in optimism about future conditions in agriculture,” the groups noted in a release.
China agreed to $40 billion in annual purchases of U.S. ag goods as part of the agreement.
The barometer’s index of future expectations shot up more than 20 points, but the index of current conditions — how farmers feel about the present day — rose only a single point.
This month’s barometer also surveyed its 400 respondents about a looming farm program decision. By mid-March, growers will need to choose which risk management tool they plan to use for the upcoming growing season, but 57% of those surveyed say they aren’t sure. Of those who disclosed their program of choice, the Price Loss Coverage program led the way with 23% of respondents; the remaining 20% of those surveyed are split between different iterations of the Agriculture Risk Coverage program — 14% said they plan to enroll in the ARC-County program and another 6% said they’ll sign up for ARC-Individual.
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