This Week In Ag #96

The greatest event in history took place at a farm setting, in a stable. The first to bear its witness were farmers, the shepherds. Merely coincidences? I think not. Here’s wishing you a Very Merry Christmas!

Lots of fuss is being made over the incoming administration and potential policies that will impact farmers. With the prospect of renewed trade tariffs, migrant labor issues and a war on seed oils, you’d think it would be all doom and gloom along the rural route. Yet that appears to be anything but the case. Farmer sentiment rocketed 30 points last month, its highest point in over 3.5 years, based on the Purdue Ag Economy Barometer. When it comes to future expectations, farmer optimism is currently among the highest levels in the past 10 years. The number of farmers expecting better financial times within the next year, for themselves and the industry, has more than doubled. Considering the study was taken one-week post-election, it’s safe to conclude that this optimism is largely due to the election results. Trump won farming-dependent counties with 78% of support. You may be asking, how can that be, especially considering foreign trade is so vital to the ag economy? For starters, farmers are people too. Just like many voters, they consider a variety of cultural, national security, domestic and values-related issues when entering the ballot booth. They also see the big picture. A robust economy brings greater consumer spending. That means more ribeyes over hamburgers, more fresh produce over canned fruits and vegetables and more fashion upgrades to wardrobes. Rising farmer optimism seems to be following that of American consumers. Holiday season spending is tracking well ahead of last year, while Cyber Monday recorded the biggest on-line shopping day of all time. Post-election optimism is rising dramatically among business leaders, both big and small alike. In a poll of CEOs, two-thirds said they now expect business conditions to improve in 2025, up 21 percentage points from October. According to the NFIB, small business owners expecting economic improvement rose a whopping 41 points. Keep in mind that 82% household income among farmers comes from off the farm. That’s due to both second-jobs and jobs by spouses. The prospect of a more robust overall economy will provide a lift for most farm families. Presumed lower taxes, lower energy costs and less regulation (55% of farmers believe regulations will become less restrictive during the next four years) is also appealing to farmers. None of this is meant to suggest that all is now jolly on the farm. The aforementioned concerns are real. And despite the current corn market rally, the 2025 outlook remains a Bah Humbug on many levels. But it’s encouraging to see a renewed sense of optimism. Let’s hope it extends beyond the holiday cheer.