Ag Barometer Shows Drop In Farmers’ Economic Outlook
U.S. farmers now have a more pessimistic outlook about the agricultural economy, both near-term and long-term, according to the latest Purdue/CME Group Ag Economy Barometer.
The barometer landed at 92, down nine points from September’s 101 reading. The current reading is the second-lowest since data collection began a year ago, with only March’s 85 coming in lower. The barometer is based on a monthly survey of 400 U.S. agricultural producers.
This is how farmers felt as of November 1.
The drop was due in large part to the Index of Future Expectations, which fell from 109 in September to 95 in October, said Jim Mintert, barometer principal investigator and director of Purdue’s Center for Commercial Agriculture.
“The decline in producer sentiment recorded during October was primarily driven by an erosion in producers’ perspective regarding the long-run health of the U.S. agricultural economy,” he said. “Producers expressed strong pessimism about the agricultural economy's prospects in the next year,” Mintert stated in a Purdue University press release.
Of all respondents, 79% said that they expect bad times financially over the next 12 months — a jump of 11 percentage points since September. This is the highest share of respondents expressing pessimism since data collection began.
A factor in producer outlook on the future is price expectations, Mintert said in the release. This month’s survey included questions about expectations for movement in July 2017 Chicago Board of Trade (CBOT) futures prices for corn and soybeans: 27% of respondents said they expect July 2017 CBOT corn futures prices below today’s levels; 25% said they expect July 2017 CBOT soybean futures prices below where they are today.
Many producers indicated they will make crop management changes in 2017 as a result of these expectations, including 46% who intend to lower fertilizer rates.
Also included in the October report is the quarterly Ag Thought Leaders Survey of 100 agribusiness executives, commodity association leaders, agricultural lenders, and academics engaged in the agricultural sector, according to the Purdue University press release.
Overall, the thought leaders were more optimistic about crop prices than producers.
Read the full October report, including analysis of the Ag Thought Leaders Survey, at http://purdue.edu/agbarometer.