Purdue Ag Barometer registers big drop
WEST LAFAYETTE (Inside INdiana Business) — Farmers are feeling less optimistic about the farm economy than they were in July according to results of a new survey conducted by Purdue University. After rising sharply two months in a row, the Ag Economy Barometer declined 29 points, down from the 153 it registered in July.
The Purdue Center for Commercial Agriculture says that is one of the biggest single-month declines since it started collecting data for the barometer.
The university says the barometer’s drop was attributable to declines in both the Index of Current Conditions and especially the Index of Future Expectations.
The center says weaker sentiment was fueled in part by both crop and livestock price declines that took place during late July and early August.
Prices for corn and soybeans fell sharply after two things hit the grain market; crop conditions improved, and USDA released a grain report which had larger than expected crop production estimates.
Purdue says nearly all of this month’s survey responses were collected following USDA’s release of the August 12 Crop Production report.
The responses show farmers are much less inclined to think now is a good time to make capital investments on their farms. “But notice the August reading of the capital investment index was still higher than both the May and June readings, so farmers have not lost all of their optimism with respect to investment in agriculture,” said Jim Mintert, director for Purdue’s Center for Commercial Ag.
Mintert says also producers are more a bit more negative on farmland values, a growing number of those surveyed expect farmland values to drop in the short-term.
Despite the negative opinions, the survey shows farmers in August were slightly more optimistic that the trade dispute with China. Although, as Mintert points out, a large majority of producers still think resolution of the dispute will not come quickly.
The nationwide survey of 400 U.S. agricultural producers was conducted from August 12 through August 20, 2019. Click here to read the full report.