WEST LAFAYETTE, Ind. and
CHICAGO, May 1, 2018 /PRNewswire/ -- Trade war
concerns continue to drive a sharp decline in producer sentiment
toward the agricultural economy, according to the Purdue University/CME Group Ag Economy
Barometer.
The April barometer reading of 125 was 10 points lower than a
month earlier and 15 points below the February reading. The
barometer is based on a monthly survey of 400 agricultural
producers from across the country.
The drop in producer sentiment was driven by declines in both
the Index of Current Conditions, which fell 11 points to 123, and
the Index of Future Expectations, which fell 9 points to 126. The
Index of Current Conditions was at its lowest level since
May 2017, while the Ag Economy
Barometer and the Index of Future Expectations were at their lowest
levels since March 2017.
Producers' weakening perceptions of current conditions in the
production agriculture sector, along with a decline in their
expectations for future economic conditions, were the main drivers
of the barometer's overall decline, said James Mintert, the barometer's principal
investigator and director of Purdue
University's Center for Commercial Agriculture.
"There seems to be a spillover effect that is driving concern
among agricultural producers," Mintert said. "Negative perceptions
about exports spill over into lower expectations for commodity
prices, and then that changes producers' views about farmland
prices."
The trade dispute with China
continues to be an area of concern. The biggest issue is the
possible impact on U.S. soybean exports, 30 percent of which go to
China. A majority of producers
said they expect a sharp decline in the November soybean futures
contract price, possibly to below breakeven.
The April survey also showed a decline in the number of
producers expecting good times for the livestock sector, with just
45 percent saying they felt optimistic about the future compared to
59 percent a month earlier. This is the largest one-month drop
since data collection began in fall 2015.
"There was already a sharp drop in hog prices that took place
from mid- to late- winter, then add to that the impact of
China's 25 percent tariff on U.S.
pork imports," Mintert said. "It adds a layer of doubt regarding
the profitability of pork production and appears to be affecting
producers' plans to increase hog production."
The survey also asked producers about their perspectives on
farmland values. There was a noticeable decline from mid-winter,
with 46 percent feeling optimistic about higher land values in 5
years compared to 53 percent in February.
Producer sentiments toward large investments on their farms and
used machinery values stayed mostly unchanged compared to a month
earlier, with 28 percent of respondents saying it was a good time
to make large farm investments, 1 percent lower than in March.
Read the full April Ag Economy Barometer report at
http://purdue.edu/agbarometer. This month's report includes
additional information on the challenges facing livestock
producers, weakening sentiment toward farmland values, and
continuing trade war concerns.
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
As the world's leading and most
diverse derivatives marketplace, CME Group (www.cmegroup.com) is
where the world comes to manage risk. CME Group exchanges offer the
widest range of global benchmark products across all major asset
classes, including futures and options based on interest rates,
equity indexes, foreign exchange, energy, agricultural products and
metals. Around the world, CME Group brings buyers and sellers
together through its CME Globex® electronic trading platform. CME
Group also operates one of the world's leading central counterparty
clearing providers through CME Clearing, which offers clearing and
settlement services across asset classes for exchange-traded and
over-the-counter derivatives. CME Group products and services
ensure that businesses around the world can effectively manage risk
and achieve growth.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex and E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT, Chicago Board of Trade,
KCBT and Kansas City Board of
Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York
Mercantile Exchange and ClearPort are trademarks of New York
Mercantile Exchange, Inc. COMEX is a trademark of Commodity
Exchange, Inc. Dow Jones, Dow Jones Industrial Average, S&P 500
and S&P are service and/or trademarks of Dow Jones Trademark
Holdings LLC, Standard & Poor's Financial Services LLC and
S&P/Dow Jones Indices LLC, as the case may be, and have been
licensed for use by Chicago Mercantile Exchange Inc. All other
trademarks are the property of their respective owners.
Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Sources: Jim Mintert,
765-494-4310, jmintert@purdue.edu
David Widmar, 765-494-0848,
dwidmar@purdue.edu
Related website:
Purdue
University Center for Commercial Agriculture:
http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: The Purdue/CME
Group Ag Economy Barometer fell sharply in April, dropping from 135
to 125 amid continuing trade concerns. (Purdue/CME Group Ag Economy Barometer/James Mintert)
A publication-quality photo is available at
https://news.uns.purdue.edu/images/2018/april-barometer.jpg.
CME-G
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SOURCE CME Group