WEST LAFAYETTE, Ind. and
CHICAGO, July 5, 2017 /PRNewswire/ -- U.S.
agricultural producers indicated their farm operations' financial
positions are stronger than at this time in 2016, but expressed
concerns that they might not meet their 2017 financial targets,
according to a monthly producer survey conducted as part of the
Purdue University/CME Group Ag Economy Barometer.
The barometer, which is based on a survey of 400 U.S.
agricultural producers, read 131 for the month of June – virtually
unchanged from the April and May readings of 130.
"Although the Ag Economy Barometer has not changed appreciably
the last couple of months, it's important to note that it remains
well above levels recorded prior to November
2016," said Jim Mintert, the barometer's principal
investigator and director of Purdue
University's Center for Commercial Agriculture.
In June 2017, 13 percent of survey
respondents indicated that their operations were financially better
off than a year before - the highest reading since Purdue researchers first started surveying
producers in October 2015.
Only 3 percent of producers expressed that same positive
sentiment a year earlier. However, farmers' positive sentiment
regarding their operations' financial conditions improved steadily
during the last half of 2016, before weakening somewhat this past
winter. In the last three months, producers became more optimistic
about their farms' financial positions, with 13 percent of surveyed
producers indicating in June that their farms were financially
better off than a year earlier.
"Several factors likely contributed to the long-term shift in
producers' attitudes about their operations' financial conditions,
Mintert said. "Revenues on many farms increased as a result of
record - or near record - crop yields in 2016. Also, corn and
soybean futures prices strengthened from late summer through early
winter while production costs, especially fertilizer, moderated
when compared to last year. Farmland rental rates also continue to
soften as part of the farm economy's long-term adjustment to tight
crop operating margins.
"All of this contributed to improved current financial
conditions for many farm operations. Our survey data suggests that
for some farm operators, financial conditions have bottomed
out."
While the barometer survey indicated the current financial
situation for many farm operations had stabilized, 28 percent of
producers said they expect their farms' 2017 financial performance
to be worse than they had projected earlier in the year. That
concern could be connected to adverse planting and growing
conditions in the Eastern Corn Belt this spring, as well as recent
declines in corn and soybean prices.
The survey also revealed an uptick in producers (52 percent)
expressing concerns that extreme weather events could have
widespread adverse impacts on crop yields over the next 12
months.
"Compared to June 2016, producers
expressed more concern about the possible impact of extreme weather
on crop yields," Mintert said. "One-third of producers in our
survey said they had changed their marketing plans in response to
weather concerns, up from just 22 percent in March of this year
when we last posed the same question."
Read the full June Ag Economy Barometer report at
http://purdue.edu/agbarometer.
The Ag Economy Barometer, Index of Current Conditions and Index
of Future Expectations are available on the Bloomberg Terminal
under the following ticker symbols: AGECBARO, AGECCURC and
AGECFTEX.
About the Purdue University Center
for Commercial Agriculture
The Center for Commercial Agriculture was founded in 2011 to
provide professional development and educational programs for
farmers. Housed within Purdue
University's Department of Agricultural Economics, the
center's faculty and staff develop and execute research and
educational programs that address the different needs of managing
in today's business environment.
About CME Group
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platform. The company also offers clearing and settlement services
across asset classes for exchange-traded and over-the-counter
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Clearing Europe. CME Group's products and services ensure that
businesses around the world can effectively manage risk and achieve
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SOURCE CME Group