Optimism Falls in Farm Country, Ag Barometer Shows
Most Do Expect to Get More Farm Payments in 2020
By Mike McGinnis, Successful Farming
Agriculture.com - 9/3/2019
U.S. farmers say they are getting more pessimistic on the ag economy and more optimistic on government support payments, according to the Ag Economy Barometer.
In August, the latest results available from the CME Group/Purdue University-backed survey, the Ag Barometer fell to a reading of 124, down 29 points compared with a month earlier and just slightly below the June reading of 126.
The barometer fell due to declines in both the Index of Current Conditions, which dropped 19 points below the previous month, and especially the Index of Future Expectations, which fell 34 points below its July reading, according to the CME Group/Purdue University press release Tuesday.
“This month’s nationwide survey of 400 U.S. agricultural producers for the Ag Economy Barometer was conducted from August 12 through August 20, 2019. Weaker sentiment was fueled in part by both crop and livestock price declines that took place during late July and early August. In particular, prices for corn and soybeans fell sharply as crop conditions improved and USDA released larger than expected crop production estimates on the August Crop Production report. Virtually all of this month’s survey responses were collected following USDA’s release of the August 12 Crop Production report,” the press release stated.
Farmers remain concerned about making capital investments in their farming operation and on their short-run farmland value outlook, the survey shows.
According to the Ag Barometer, The Farm Capital Investment Index (formerly known as the Large Farm Investment Index) fell to a reading of 56 in August, 21 points lower than a month earlier, above June (42) and May (37) of this year.
In the short-term, farmers see farmland values dropping.
“The percentage of respondents expecting farmland values to rise over the next 12 months declined from 21% in July to 12% in August and the percentage expecting lower farmland values in the upcoming year increased from 18% to 21%. Although farmers’ short-run outlook on farmland values weakened since the last Ag Economy Barometer survey, their longer run (five years ahead) perspective on farmland values changed little from a month earlier,” according to the CME Group/Purdue University press release.
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