Farmers' perceptions of an improving ag economy going forward could be laying the groundwork for increased capital investments in the year ahead, according to the results of the Purdue University-CME monthly farmer survey.

Overall, the Ag Economy Barometer rose slightly compared to a month earlier, with a reading of 168 in February, a single point higher than the previous month. But Purdue ag economists James Mintert and Michael Langemeier note that the one point rise in the sentiment index was enough to push the barometer to a new all-time high, eclipsing the previous record set in January of this year.

“The barometer’s strength was underpinned by an improvement in producer’s perceptions of current conditions, which offset a small decline in expectations for the future,” say the researchers. “The Current Conditions Index set a new record high in February with a reading of 154, up 12 points from January. Expectations for the future remained strong from a historical perspective, although the Index of Future Expectations reading of 175 represented a 4 point decline from its record high set in January.”

The report goes on to say that, concurrent with the improvement in perceptions about current conditions, producers retained nearly all of the optimism about the future that they recorded in January. “Producers’ expectation of an improving ag export environment appears to be a major reason for the ongoing strength in both indices,” the researchers say.

Producers remain relatively optimistic about the resumption of trade with China. The percentage of producers expecting…