We’ve talked in the past about how the demand for farmland is often a function of how confident farmers are about their future. This phenomenon is not new or unique to agriculture. For example, the U.S. “Consumer Confidence Index” (CCI) is an indicator designed to measure consumer confidence, which is defined as the degree of optimism on the state of the economy that consumers are expressing through their activities of savings and spending. Placing a relative value on farmer attitudes, however, has been difficult until recently. Last April, DTN & Progressive Farmer started an “Agricultural Confidence Index” that tries to capture the mood in the countryside. They’ve just released the report from their September survey (The DTN/The Progressive Farmer Agriculture Confidence Index) and most respondents believe that their economic future is brighter than it was just 6 months ago.
The report provides a breakdown between various geographic regions, and between the crop and livestock sectors. It was interesting to read that nearly all the groups feel better today than they did in the spring. Higher commodity prices get most of the credit, but some think there might even be a seasonal component involved (more optimism in the fall than in the spring!). Regardless, this report supports our belief that farmers will be active land buyers this fall and land values should move higher. Now, if we can just find a few more properties to sell!
