Farmers Hopeful for Future, Concerned Now
INDIANAPOLIS - As farmers closed out their books on 2019, nearly one third said their farm’s financial performance was worse than projected at the start of last year, according to the Purdue University/CME Group Ag Economy Barometer.
The monthly economic measurement reveals the sentiment of 400 U.S crop and livestock producers.
The overall reading for December came in at 150, three points lower than the previous month.
“Farmers became more concerned about current economic conditions on their farms,” said Jim Mintert, director of Purdue’s Center for Commercial Agriculture.
But Mintert says farmers remained optimistic about the future of the ag economy ”as the index of future expectations actually rose slightly (by two points).”
The Center for Commercial Agriculture measured farmer’s attitudes about 2019 financial performance. 52% of those surveyed said their initial projections matched their farm’s financial performance. Purdue says 30% stated it was worse, while 19% stated it was better than expected.
To assess the level of financial stress among U.S. farms, producers were asked whether they expected their farm's 2020 operating loan to be larger, about the same, or smaller than in 2019.
The barometer shows 20% of the farmers surveyed expect to have a larger operating loan in 2020 compared to 2019.
Of those, 30% said they are borrowing more because they are carrying over unpaid operating debt from year to year.
“What that means is about 6% of the farms in our survey expect to carry over unpaid operating debt from 2019 into 2020. And that’s a sign that those farms are suffering significant financial stress,” said Mintert.
Click here to view the Purdue Ag Economy Barometer.