WEST LAFAYETTE, Ind. and
CHICAGO, Dec. 4, 2018 /PRNewswire/ -- Agricultural
producer sentiment held steady in November with producers remaining
optimistic about the state of the agricultural economy, according
to results from the Purdue
University/CME Group Ag Economy Barometer. The November
barometer reading of 134 was only 1 percent lower than October,
which is similar to levels seen last spring before trade
disruptions began. The barometer utilizes a survey of 400
agricultural producers from across the country.
The barometer's two sub-indices remain mostly unchanged from
October; the Index of Current Conditions held at 115, and the Index
of Future Expectations dropped 3 points to a reading of 143.
"Although there was a modest decline in the barometer this
month, there was some evidence that producers are becoming more
confident regarding the U.S. agricultural economy's future," said
James Mintert, the barometer's
principal investigator and director of Purdue
University's Center for Commercial Agriculture.
That confidence can be seen in producers' attitudes towards
their willingness to make large farm investments. Each month
producers are asked whether now is a "good time" or "bad time" to
make a large investment in buildings and machinery. Their responses
are used to produce a large investment index. In November, that
investment index stood at 56, up from 52 in October and 10 points
higher than in September of 2018 when the index set a new low of
42.
Producers were also more optimistic regarding their long term
perspective on farmland values, with 50 percent expecting higher
farmland values over the next 5 years, a sharp departure from a
month earlier when just 21 percent said they expected higher
farmland values.
However, this increase in confidence was not driven by expected
improvements in profitability. In November, only 13 percent of
respondents said they expect farm profitability to improve in the
next 12 months. When asked about farmers' equity position, 44
expect to see equity diminish in the upcoming year. Rising
interest rates could also be a factor in these perceptions as a
rise in interest rates can impact profitability and the value of
large farm assets. When asked, 85 percent of producers said they
expect interest rates to rise in the next year and 76 percent
expect to see a rise in the next 5 years compared to 2018.
With November marking an end to the mid-term election cycle,
producers were asked whether they were concerned that Congress had
not passed new farm bill legislation. Seventy-five percent of
respondents said they were either "somewhat or very concerned," 33
percent said they were "very concerned," and 24 percent said they
were "not at all concerned" about the lack of new Farm Bill
legislation.
Read the full November Ag Economy Barometer report at
http://purdue.edu/agbarometer. This month's report includes
additional information on producers' future expectations for
agricultural exports and an update on producers' intentions to
reduce their soybean acreage in the 2019 season. Additional
November barometer analysis can also be found in a video from
Mintert at https://youtu.be/Q-9NqD14EdE.
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)
enables clients to trade futures, options, cash and OTC markets,
optimize portfolios, and analyze data – empowering market
participants worldwide to efficiently manage risk and capture
opportunities. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes based
on interest rates, equity indexes, foreign
exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's
leading central counterparty clearing providers, CME
Clearing. With a range of pre- and post-trade products and
services underpinning the entire lifecycle of a trade, CME Group
also offers optimization and reconciliation services through
TriOptima, and trade processing services through Traiana.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and, E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT and Chicago 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. BrokerTec, EBS, TriOptima, and Traiana are
trademarks of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB,
and Traiana, Inc., respectively. 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
Source: Jim Mintert,
765-494-4310, jmintert@purdue.edu
Related website:
Purdue
University Center for Commercial Agriculture:
http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: Producer sentiment holds steady according
to latest Purdue/CME Group Ag Economy
Barometer, but lack of new farm bill concerns farmers.
(Purdue/CME Group Ag Economy
Barometer/James Mintert)
A publication-quality photo is available at
https://news.uns.purdue.edu/images/2018/november-barometer.jpg
CME-G
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SOURCE CME Group