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Ag marketers optimistic on business outlook

 

Agribusiness executives generally believe the ag economy and business environment will strengthen over the coming year, according to a poll from Agri Marketing magazine and the American Business Media's (ABM) Agri-Council.

The poll combines responses to several questions to calculate an “Agri-Marketers Confidence Index” (ACI) relating to current conditions and a similar index for the longer-term outlook. The most current poll, conducted in October, shows the ACI for current conditions at 84, down from 94 in the same poll conducted in June. The ACI for expectations over the next 12 months however, at 89, was up significantly from the June index of 72. The overall ACI improved from 81 in June to 87 in October.

Asked how they believe business conditions will be for their companies in the U.S. agricultural market 12 months from now, 45 percent of polled executives responded that business will be better, 53 percent expect conditions to remain the same and 2 percent expect poorer conditions. Those figures compare with 33 percent, 54 percent and 13 percent expecting better, similar or poorer conditions respectively in the June survey.

Asked to assess the current and 12-month outlook for U.S. farmers and ranchers, 65 percent rated the current outlook positive and 46 percent expect conditions to improve over the next 12 months. Another 46 percent expect conditions to remain the same 12 months from now.

Of the respondents, 41 percent expect to increase their budgets for marketing products to farmers and ranchers one year from now, while 62 percent expect their marketing budgets will remain the same.

Agri Marketing Publisher Lynn Henderson notes that marketers selling products to livestock producers have a somewhat negative view of the current economic environment, as high input costs squeeze margins in spite of high livestock prices. They see the longer-term outlook more positive though. "The speculation is the higher crop prices will push planted acres up next year," he says. "With anything close to normal yields, crop prices could fall substantially, bringing profitability back into the livestock sector.”

View the results of the Agri Marketing/AMB survey.

 

 

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