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Farmers’ Current Optimism Dips; Long-Term View Stays Steady, Ag Barometer Shows
December revealed a lower level of optimism for farmers’ view on current economic conditions, dipping 12 points, according to the Purdue University/CME Group Ag Economy Barometer.
The poll checked in at 141 for December, slumping from November’s 153 tally. The future outlook saw a slight increase, rising 2 points for December and climbing to a total of 155.
“Agricultural producers in December were less optimistic about current economic conditions on their farms than a month earlier but remained optimistic about future economic conditions,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture in a release.
The barometer collects information from survey results of 400 U.S. crop and livestock producers each month.
The survey results also hit on producers’ financial results from 2019. The results showed 52% of producers forecasted initial projections that lined up with their farm’s performance; 30% saw worse results than projected; and 19% exceeded expectations.
“These results are indicative of the variability in economic conditions on U.S. farm operations, with some farms performing better than expected and others worse than expected,” Mintert says in a release.
After a challenging 2019 for many farmers, the survey gauged loan expectations for 2020. It asked producers if their 2020 operation loan is expected to increase, remain about the same, or decrease compared with 2019. Producers predicting a larger 2020 loan were asked why they anticipate that.
About one out of five farmers predicts an increase in loan size for 2020. About three of 10 expect the climb due to unpaid operating debt from 2019. From those answers, Purdue University and CME Group figure about 6% of farms dealt with financial stress toward the end of 2019.
Responses related to rental rates yielded more of a consensus. About 75% expected no change; 8% to 9% figure rates will rise; and 13% to 14% expect a dip.
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Looking at the national scope, a majority of producers still hold a positive view of the U.S. and China trade dispute. December results showed 54% of producers expect it to be resolved soon – a dip from November’s 57%. Despite the decline, December checks in as the second highest positive response to the topic since March 2019.
Producer optimism slid from 80% to 72% when asked if the trade dispute would favor U.S. agriculture. The results to this question have consistently reached 70% or higher, according to the barometer.
The full report can be read at https://purdue.ag/agbarometer.