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Farmers Feel Ag Economy Deteriorating
U.S. farmers see the current state of the ag economy less of a concern than in the future.
In its latest survey results Wednesday, for November, the Purdue University/CME Group Ag Economy Barometer shows that producers expressed lower sentiment toward the agricultural economy in November on the heels of fall harvest, according to the Purdue University/CME Group press release.
For November, the barometer was recorded at 128, a 7-point decline from October’s 135 and the second-lowest reading of 2017. The barometer is based on a monthly survey of 400 agricultural producers from across the country, the release states.
“The November slide in sentiment was primarily driven by reduced optimism about the future,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “We saw the Index of Future Expectations fall by 10 points, while the barometer’s other sub-index, the Index of Current Conditions, held steady at 129.”
When asked what they thought about the next 12 months, farmers responded that the bad times will outweigh the good times financially for the agricultural economy; 62% said they thought the next 12 months will be bad times financially in U.S. agriculture, according to the released statement.
The statement indicates that the percentage of producers expecting bad times in agriculture has been increasing since July when 50% of survey respondents said they were expecting bad times.
“Throughout 2017, survey respondents have been asked about agricultural trade in an effort to understand how proposed policy changes might be impacting producer sentiment. When asked about the importance of agricultural exports to the overall U.S. agricultural economy, 96% rated them as important,” according to the press release.
The survey also asked producers about the North American Free Trade Agreement (NAFTA).
“When we asked producers about NAFTA specifically, they were less confident about its importance to the U.S. agricultural economy,” Mintert said. “While 70% did rate it as important, a substantial 20% rated NAFTA as neutral, meaning neither important nor unimportant.”
On a regular basis, the survey asks respondents about their expectations for farmland prices. For the first time in survey history, more producers said they expect higher farmland values than lower farmland values. Among respondents, 21% said they expect farmland values to turn higher in the next 12 months, 62% thought values would remain unchanged, and 17% expect lower farmland values, according to the press release.