Ag Producers' Confidence Remains Slightly Positive
March 24, 2014 - Omaha, NE
Overall agriculture producer confidence remains unchanged since last March despite a drop in producers' feelings about their current situation, according to the latest DTN/The Progressive Farmer (DTN/PF) Agriculture Confidence Index.
Producers' overall confidence remained somewhat positive at 106.9, up slightly from 105.5 last December and unchanged from March 2013. The value of 100 is considered neutral. Values above 100 indicate optimism, whereas values below signify pessimism.
The DTN/PF Agriculture Confidence Index, which surveyed 500 producers between March 1 and 10, measures the sentiments of agriculture producers on their overall impressions of the agriculture sector. Farmers are also asked to rate current and long-term input prices and net farm income to gauge their attitudes toward the present situation and future expectations.
Producers viewed their present conditions as positive with a score of 128.1, a drop from 135.3 last March but up slightly from 123.5 in December. Producers' future expectations dropped to 92.8, a decrease of just 0.8 since December but up from 88.2 in March 2013.
Despite an overall positive confidence score, there was a significant disparity in confidence levels between crop and livestock producers. Driven by higher meat prices and lower input costs, livestock producers' confidence rose to a near all-time high of 116.4, up from 107.5 last March and off just 0.2 from the record set in September 2010. In addition, livestock producers view their present situation as very positive (145.1) but were considerably less optimistic for the upcoming year (97.3).
Crop producers' confidence dropped to the lowest level in four years to 102.7, down from 104.3 in December and from 106.8 last March. Crop producers' expectations for the coming year fell to 90.7 from 93.4 in December but were up from 87.9 in March 2013. Their feelings on their present situation remained unchanged at 120.8 since December but declined from 135.2 in March 2013.
"Much of the crop producers' attitudes about their current situation can be attributed to lower corn prices from the previous year, although current prices are at a level higher than what analysts had anticipated at this point for the year," said DTN/The Progressive Farmer Markets Editor Katie Micik, director of the confidence index, which is conducted before plantings, prior to harvest and after harvest each year.
While producers' attitudes remained mixed, agribusinesses were more confident about the industry, according to the DTN/PF Agribusiness Confidence Index, which is similar to the producer index and measured the sentiments of 100 agribusinesses between Feb. 28 and March 5. Agribusiness confidence climbed to 107.3 in March from 102.5 at the end of 2013, due in large part to stabilized crop prices. Seventy-two percent of agribusinesses surveyed felt good about their current sales, marking an increase of 14.6 percent since December and a 12 percent increase since last March. However, 76 percent of those agribusinesses surveyed believed sales expectations over the next 12 months will remain the same or get worse.
"Fertilizer retailers are somewhat concerned that reductions in corn acres could impact fertilizer sales and profits," Micik noted. "With incomes narrowing, producers may turn to higher-priced soybeans over corn."
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