WEST LAFAYETTE, Ind. and
CHICAGO, Sept. 6, 2016 /PRNewswire/ -- After months
of increases in producer sentiment toward the U.S. agricultural
economy, the August reading of the Purdue/CME Group Ag Economy
Barometer showed that declining commodity prices are weighing on
the minds of producers.
Producer sentiment declined sharply to 95 - a 17-point drop from
the July reading. The barometer is based on a monthly survey of 400
U.S. agricultural producers and includes measures of sentiment
toward current conditions and future expectations.
The Index of Current Conditions fell from 93 in July to 80 in
August, while the Index of Future Expectations dropped to 102 from
July's 121.
"This was in sharp contrast to July when farmers' optimism about
future prospects pushed the barometer up, despite their concerns
about current economic conditions," said Jim Mintert, the
barometer's principal investigator and director of Purdue's Center for Commercial Agriculture. "Farmer
sentiment in late spring and early summer was buoyed by a spring
rally in key commodity prices, but near-ideal growing conditions
for corn and soybeans this summer helped push yield prospects up
and crop prices down sharply."
Since the peak of the price rally in mid-June, December 2016 corn futures have fallen by more
than $1 per bushel and November
soybean futures by $1.75 per
bushel.
In its August Crop Production report, the U.S. Department of
Agriculture indicated that record corn and soybean yields are
expected this fall. If that's the case, carryover stocks for both
crops will grow, potentially resulting in the lowest corn prices in
a decade.
Unsurprisingly, the resulting tighter operating margins are
leading to adjustments in production costs, said David Widmar,
senior research associate who works on the barometer.
"What is somewhat surprising is that more producers expect input
prices to rise in 2017 than decline," he said. "This was especially
true for crop protection products, as nearly one-third of
respondents expected prices to increase for herbicides,
insecticides and fungicides. The long-term trend for crop input
prices to rise seems to be leading to skepticism regarding
prospects for input prices to decline, despite the lack of
profitability among crop producers."
Read the full August report, find additional resources and sign
up to receive monthly barometer email updates at
http://purdue.edu/agbarometer.
About the Purdue University
Center for Commercial Agriculture
The Center for Commercial Agriculture was founded in 2011 to
provide professional development and educational programs for
farmers. Housed within Purdue
University's Department of Agricultural Economics, the
center's faculty and staff develop and execute research and
educational programs that address the different needs of managing
in today's business environment.
About CME Group
As the world's leading and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) is where the world comes to manage
risk. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes, including
futures and options based on interest rates, equity indexes,
foreign exchange, energy, agricultural products and metals. Around
the world, CME Group brings buyers and sellers together through its
CME Globex® electronic trading platform and its exchanges based in
Chicago, New York and London. CME Group also operates one of the
world's leading central counterparty clearing providers through CME
Clearing and CME Clearing Europe, which offer clearing and
settlement services across asset classes for exchange-traded and
over-the-counter derivatives. CME Group's products and services
ensure that businesses around the world can effectively manage risk
and achieve growth.
CME Group is a trademark of CME Group Inc. The Globe Logo, CME,
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Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the
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Further information about CME Group (NASDAQ: CME) and its products
can be found at www.cmegroup.com.
Related website:
Purdue University Center for Commercial
Agriculture:
https://ag.purdue.edu/commercialag/Pages/default.aspx
CME Group: http://www.cmegroup.com/
CME-G
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SOURCE CME Group