(NAFB) — Farmer concern regarding low prices and the farm economy led to a sharp drop in the August Ag Economy Barometer.
The Perdue/CME Group economic measure fell 29 points last month to a reading of 124. The barometer’s decline was attributed to declines in both the Index of Current Conditions, which dropped 19 points, and the Index of Future Expectations, which fell 34 points below its July reading.
A reading greater than 100 still indicates positive sentiment, while a reading below indicated negative sentiment.
Weaker views were fueled in part by both crop and livestock price declines that took place during late July and early August. Meanwhile, producers’ concerns about the future of the farm economy led to a more negative outlook on the advisability of making capital investments and on the short-term farmland value outlook. Meanwhile, farmers in August were slightly more optimistic the trade dispute with China will be resolved soon, although many still think resolution of the dispute will not come quickly.
Source: National Association of Farm Broadcasters
Ag barometer declines sharply as commodity prices weaken; Majority of farmers expect MFP payments in 2020
By James Mintert and Michael Langemeier/Purdue University/CME Group
After rising sharply two months in a row, the Ag Economy Barometer weakened significantly in August falling back to a reading of 124, down 29 points compared to a month earlier and just slightly below the June reading of 126. The barometer’s decline was attributable to declines in both the Index of Current Conditions, which dropped 19 points below the previous month, and especially the Index of Future Expectations, which fell 34 points below its July reading. This month’s nationwide survey of 400 U.S. agricultural producers for the Ag Economy Barometer was conducted from August 12 through August 20, 2019. Weaker sentiment was fueled in part by both crop and livestock price declines that took place during late July and early August. In particular, prices for corn and soybeans fell sharply as crop conditions improved and USDA released larger than expected crop production estimates on the August Crop Production report. Virtually all of this month’s survey responses were collected following USDA’s release of the August 12 Crop Production report.