Farmer sentiment rises despite ongoing trade concerns
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Agriculture producers across the United States are showing continued optimism about their farm operations, according to the latest Purdue University/CME Group Ag Economy Barometer.
The barometer is calculated monthly from a telephone survey of 400 agricultural producers across the country. Purdue says producers are citing an improvement in the current situation on U.S. farms as the primary driver behind the stronger sentiment, though concerns of a trade war continue to grow.
The barometer rose 11 points to a reading of 152 in February, which Michael Langemeier, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture, says was a bit of a surprise.
“We certainly have some expected payments coming from reconciliation in December for field crops. So that’s helpful,” Langemeier said. “But also, corn and soybean prices, as we noted in the report, are stronger. Particularly corn prices are stronger than what they were last December and earlier in the fall.”
James Mintert, professor emeritus of agricultural economics at Purdue, added that a positive shift in commodity prices combined with a strong livestock sector is also contributing to the growth in optimism.
“I looked at cash corn prices at some Eastern Corn Belt locations, and if you look at cash prices for corn in that low point, which was roughly mid-October, and compare that to when we did this survey, some of those prices were up on corn as much as 25%,” Mintert said.
The latest survey was conducted between Feb. 10-14. About 15% of respondents said they expected their farm’s performance to be worse than last year, which was largely unchanged from January. However, it is lower than the 26% reported in October.
A growing number of producers also expressed concern over the potential for a trade war that could result in a significant decrease in U.S. ag exports.
Nearly half of respondents said that a trade war is either likely or very likely, Mintert said.
“They think…[there is] at least a good chance of a trade war taking place,” he said. “Thinking about the next several years, they’re thinking trade policy could have a big impact on their farm and the ag economy.”
You can connect to more from the February Ag Economy Barometer by clicking here.