A combination of COVID-19-related factors is pushing farmer’s outlook on the economy to a three-year low. The Purdue University/CME Group Ag Economy Barometer plummeted in April to a reading of 96, a 72-point drop from its record high just two months ago.
“Over the past two months, producers have felt the first shock waves being created by the coronavirus,” said James Mintert, director of Purdue University’s Center for Commercial Agriculture.
Mintert says coronavirus concerns, commodity price declines, and supply-chain disruptions sunk producer sentiment. He says the last time the barometer fell below 100 was October 2016.
“Disruptions in the supply chain are causing many to look at ways they can mitigate risk in this uncertain environment and sharp declines in commodity prices have added significant financial pressure on many U.S. farming operations,” said Mintert.
One of the big factors behind the decline is the drop in livestock prices. Over the course of fewer than two months, June live cattle declined 21% while June lean hog futures prices dropped 33%
When asked if they were worried about the pandemic impacting their farm’s profitability this year, 67% say they are fairly or very worried.
The Ag Economy Barometer is based on responses from 400 U.S. agricultural producers and this month’s survey was conducted from April 19-24, 2020.
Click here to view the full report. Watch the analysis from Jim Mintert in the video below.