SHARP DROP IN THE AGRI-MARKETERS' CONFIDENCE INDEX
Nov. 4, 2013
Source: Agri Marketing magazine
The Agri-Marketers' Confidence Index (AMCI) dropped significantly since it was last measured in March 2013. The poll, conducted among corporate agribusiness managers in mid-October showed the majority think the current business conditions for their company is positive but believe it will soften over the next 12 months.
More pronounced is their feeling about future business conditions for their customers - America's farmers and ranchers.
On a scale of 0 (lowest) to 100 (highest), the overall AMCI scored a 77, which compares to 88 when the poll was conducted in March and 85 in October 2012. That is the lowest since the poll was started in March 2010.
"That's driven mostly by expectations for the future," says Steve Steve Custer, Executive VP/Chief Operating Officer at Farm Journal Media and Chairman of the American Business Media Agri-Media Council. "Overall, we're seeing a continuation of the 'things are going to get worse' outlook."
To view that report click here.
"We've seen future expectations trending down now for a year, but even more pronounced now. I believe there is a real uncertainty as to where everything is going to shake out - demand, land prices, and the driver: commodity prices. This is kind of unchartered territory with declining commodity prices but with producers being in very good financial shape. Still, I think the expectation is producers will watch expenditures a little more closely."
AMCI for the current outlook for U.S. farmers and ranchers was 72 compared to 93 in March. The Index for farmers/ranchers' outlook 12 months fell from 48 to 40.
"It will be interesting to see where the index sits this coming March after all the harvest news has been digested and we start seeing how producers adjust acres and inventories going into the 2014 growing season," notes Custer.
"If the dramatic downward direction predicted here doesn't pan out, we'll probably see a reversal in the current condition indices and maybe even future prospects. As I said, this is a bit of uncharted territory for many all of us."
"It is interesting to note," says Lynn Henderson, Publisher of Agri Marketing magazine which directed the poll, "even though the AMCI fell, 82% of the respondents reported their organizations are planning to increase or leave their marketing communications budgets at the same level."
The poll was conducted by Agri Marketing magazine and the ABM's Agri-Council and was sent to 225 managers of companies that develop and sell products to North American crop and livestock producers. A total of 72 (32%) company representatives participated in the poll, including a very wide sampling of large and small enterprises, as well as both crop and livestock-oriented companies.
"The AMCI is modeled closely along the lines of the well-known consumer confidence studies regularly reported by The Conference Board," reports Custer. "It is an indicator designed to measure the confidence or the degree of optimism among agribusiness marketers on the state of the agribusiness economy. It looks at both their outlook for their own business now and in the future, as well as their perception of the outlook for their customers - the nation's farmers and ranchers."
AMCI is calculated by looking at the percentage of positive versus negative responses.
To read how AMCI is calculated and its complete results, click here.
A few of the highlights include:
*67% think the current business conditions for their companies are positive, while 20% believe it is negative.
*31% think the agricultural market will be better than now, while 25% think it will be worse.
*23% think the general outlook for farmers and ranchers will by better 12 months from now, while 35% think it will be worse.
Confidence Index Results