AGRIBUSINESS CONFIDENCE INDEX
The DTN/The Progressive Farmer Agribusiness Confidence Index
WASHINGTON, SLOW FARMER SALES DRAG ON BUSINESS
By Katie Micik
DTN Markets Editor
January 6, 2014
The Agribusiness Confidence Index improved slightly over last year, to 102.5, largely due to better assessments of sales of goods and services. All but one survey respondent said current sales of products and services to farmers were good (57%) or normal (42%). Sixty three percent of businesses said they expect sales to stay the same in the next 12 months.
The survey includes responses from equipment dealers, market advisers, crop consultants, crop insurance agents, agronomic suppliers, country elevators and banks. Not every sector of the business responds the same to the anticipated downturn in farm income.
For instance, Deere and Company expects ag machinery sales to decline 5% to 10% in fiscal 2014. Local banks may have more farmers applying for operating notes.
Agribusinesses rate their present situation a little higher than last year at 120.7, while expectations stayed about the same at 90.2, a negative reading.
"People serving farmers have been waiting for more than two years now for the good times to end. They haven't," Hill said. "These business people have a demonstrated tendency to react to uncertainty about the future, and the index shows that they consistently make out better than they had expected.
"As with any business, uncertainty is viewed as a negative, causing them to hold back on investing and hiring. The uncertainty is about what's happening in Washington around the Farm Bill. With the Farm Bill up in the air for several years now, there are no solutions coming out of Washington, only continued uncertainties."
DTN News Intern Emily Unglesbee contributed to this article.
Katie Micik can be reached at email@example.com