AGRIBUSINESS CONFIDENCE INDEX
The DTN/ The Progressive Farmer Agribusiness Confidence Index will be conducted three times per year where questions are asked one month in advance of the Agriculture Confidence Index (our producer survey):
• February - pre-planting season
• August - pre-harvest
• November - end of year
It is in the above timeframes where agribusinesses may be best able to determine present and future prospects in terms of product and service sales to their farmer-rancher customers. In effect, the Agribusiness Confidence Index becomes a potential leading indicator of the producers' Agriculture Confidence Index.
The Agribusiness Confidence Index is built on the following issues:
• current and future sales of products and services,
• current and future profitability, and
• future prospects of their overall business. (In this index, the 'future' will be 12 months.)
The Agriculture Confidence Index will determine the level of optimism for each question. We will calculate a neutral, positive or negative outcome. A neutral outcome for any question would be a .5, or '50%'. If a score is over 50% it would indicate positive outcomes, and lower than 50% would indicate negative outcomes.
In the long run, we will move to an index since some questions may never have 'positive' outcomes (above 50%) and could mislead as to 'trends'. For the second and all subsequent surveys, the Agriculture Confidence Index will compare the relative value obtained in that period to the value obtained in the first measurement period to calculate an index value for each question. From the data we will essentially be able to derive three different values:
1. Average the 5 indices together to get the Agribusiness Confidence Index.
2. The 2 'current' questions form the 'Present Situation' Index.
3. The 3 'future' questions form the 'Expectations' Index.
For the Agribusiness Confidence Index we will utilize a sample size of 100. This will yield an overall statistical confidence interval of +/- 9.80 points at the 95% level. Sample focuses on the diverse universe of retailers and businesses servicing farmers including:
• seed/chemical retailers
• feed/ animal health providers
• independent crop advisors
• farm business advisers
• large animal vets
• machinery parts suppliers
• and many other types of vendors servicing the producer industry
Data will be collected by telephone only.
For additional information please contact Josie Hemmingsen at (952) 851-7227.