WEST LAFAYETTE, Ind. and
CHICAGO, Oct. 2, 2018 /PRNewswire/ -- Agricultural
producer sentiment dropped to its lowest level since October 2016 as producers expressed concern over
worsening farm financial conditions, according to the latest
Purdue University/CME Group Ag Economy
Barometer reading. The September barometer reading was 114, down 15
points since August. The barometer is based on a monthly survey of
400 agricultural producers from across the country.
Large declines were also seen in the barometer's two
sub-indices, the Index of Future Expectations, which fell 10 points
and the Index of Current Conditions, which fell 25 points, both
compared to their respective August readings.
"The barometer readings have been unusually volatile over the
past few months," said James
Mintert, the barometer's principal investigator and director
of Purdue University's Center for
Commercial Agriculture. "Concerns about the ongoing impact of trade
conflicts, and especially China's
tariffs on imports of U.S. ag products, continue to reverberate
throughout the U.S. agricultural sector."
Producers indicated that financial conditions on their farms
deteriorated significantly as 2018 unfolded and their expectations
for the future also weakened. In September, 54 percent of farmers
surveyed said their farm's financial condition was worse than a
year earlier, up from 38 percent who felt that way in June. The
September survey also indicated that 33 percent of producers expect
their farm's financial condition to be worse a year from now, up 15
points compared to responses received to the same question in
June.
Trade conflicts and tariffs continue to be a source of angst
among U.S. farmers. When asked whether they expect trade conflicts
to lower their farm's net income, more than 70 percent of producers
surveyed said they expect lower income in 2018 because of trade
disruptions with a large majority of respondents saying they expect
an income decline of more than 10 percent.
The negative outlook was particularly noticeable when producers
were asked whether now is a good time to make large investments in
farm machinery and buildings for their farming operation and on
next year's farmland cash rental rates. In September, 78 percent of
respondents said it was a bad time to make large investments and
just 20 percent said it was a good time to invest, the lowest
combined reading on large farm investments since the barometer
launched in October 2015. Farmers
also indicated that worsening farm financial conditions could weigh
on farmland cash rental rates in 2019 as nearly two-thirds of
farmers surveyed said they expect to see lower cash rental rates
for farmland next year.
Read the full September Ag Economy Barometer report at
http://purdue.edu/agbarometer. This month's report includes
producer's responses to questions about whether the trade conflict
is influencing their soybean storage plans and their expectations
for farmland values. Additional September barometer analysis can
also be found in a video from Center for Commercial Agriculture
Director James Mintert at
https://youtu.be/t0d4Y0OXtao.
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.
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Related website:
Purdue
University Center for Commercial Agriculture:
http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
A publication-quality photo is available at
https://news.uns.purdue.edu/images/2018/september-barometer.jpg
CME-G
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SOURCE CME Group