By James Mintert & Michael Langemeier
 
The May reading of the Purdue University/CME Group Ag Economy Barometer was 141, 16 points higher than in April 2018 and the highest barometer value since January 2017. The rise in the barometer, a sentiment index derived from a monthly survey of 400 agricultural producers across the U.S., was driven both by producers improved view of current conditions and, especially, their more optimistic view of the future. The Index of Current Conditions rose to 132 during May, 9 points higher than in April while the Index of Future Expectations climbed to a reading of 145, 19 points higher than a month earlier. This was the highest future expectations reading since February 2017.
 
Over time, the percentage of respondents reporting that their farms’ financial condition is worse than a year earlier has drifted lower as has the percentage of respondents expecting further deterioration in the year ahead. On the May survey, 36% of respondents reported that their farms’ financial condition was worse than a year earlier, down 5% from a month earlier and the lowest percentage reporting worsening financial conditions since the survey began in October 2015.

When asked to look ahead 12 months, the percentage of producers expecting their farm to be in worse financial condition a year from now fell to 18% in May, down from 23% a month earlier. Responding to the same question, the percentage of producers expecting their farm to be in better financial shape a year from now rose from 23% in April to 30% in May, the highest percentage since February 2017.