WEST LAFAYETTE, Ind. and
CHICAGO, Feb. 5, 2019 /PRNewswire/ -- Agricultural
producers were more optimistic about the agricultural economy in
January, but they remain concerned about farmland values, according
to results from the January Purdue
University/CME Group Ag Economy Barometer. The barometer,
which is based on 400 survey responses from agricultural producers
across the country, rebounded to a reading of 143 in January, a 16
point improvement from December.
"This survey provided us with the first opportunity to measure
farmers' sentiment following the announcement of USDA's second
round of Market Facilitation Program (MFP) payments and the passage
of the 2018 Farm Bill," said James
Mintert, the barometer's principal investigator and director
of Purdue University's Center for
Commercial Agriculture. "It appears that these two announcements
provided a significant boost to producer sentiment regarding both
current and future economic conditions," said Mintert.
In January, both of the barometer's two sub-indices saw an
uptick since December, with the Index of Current Conditions rising
to 132 from 109 and the Index of Future Expectations rising to 148
from 135.
Increases were also seen in the Large Farm Investment Index,
which measures whether producers feel this is a "good time" or a
"bad time" to make large farm investments like machinery or
buildings. Over the past few months, producers have been slowly
expressing a more favorable view towards making large investments
in their farming operations, with the index climbing 11 points from
December and up 20 points from September, when the investment index
bottomed out.
However, the same cannot be said for farmland values. According
to the January survey, the percentage expecting higher farmland
values over the next 12 months declined from 17 to 13 percent in
December and, when asked to look ahead 5 years, producers expecting
higher farmland values declined 2 points to 48 percent.
To better understand farmers' planting intentions in 2019, the
survey asked farmers who planted soybeans in 2018 what their plans
are for 2019. Two-thirds of respondents said their soybean acreage
will be the same as in 2018, but 25 percent of soybean producers
said they intend to reduce their soybean acreage in 2019 compared
to last year. Looking specifically at farmers who plan to reduce
their soybean acreage in 2019, 58 percent of them said they will
reduce acreage by more than 10 percent, while 42 percent said they
would reduce acreage by 10 percent or less. This represented a
shift in attitudes among soybean farmers from last fall. Back in
November, among farmers that plan to reduce their soybean acreage,
69 percent of them said they planned to reduce their 2019 soybean
acreage by more than 10 percent.
Lastly, when producers were asked about soybean futures, four
out of ten respondents (43 percent) said they expect November 2019 soybean futures to fall below
$8.50 sometime between mid-January
and summer 2019. The negative perspective on soybean prices helps
explain producers' plans to reduce their 2019 soybean acreage.
Read the full January Ag Economy Barometer report at
http://purdue.edu/agbarometer. This month's report includes
additional information about producer's expectations for U.S. ag
exports and their farm's operating costs and whether their farm
will have to carryover operating debt into 2019 from prior years.
Each month Dr. Mintert also provides an in-depth analysis of the
barometer. That video is also available at
http://purdue.edu/agbarometer.
The Ag Economy Barometer, Index of Current Conditions and Index
of Future Expectations are available on the Bloomberg Terminal
under the following ticker symbols: AGECBARO, AGECCURC and
AGECFTEX.
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) enables clients to trade futures,
options, cash and OTC markets, optimize portfolios, and analyze
data – empowering market participants worldwide to efficiently
manage risk and capture opportunities. CME Group exchanges offer
the widest range of global benchmark products across all major
asset classes based on interest rates, equity
indexes, foreign exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's
leading central counterparty clearing providers, CME
Clearing. With a range of pre- and post-trade products and
services underpinning the entire lifecycle of a trade, CME Group
also offers optimization and reconciliation services through
TriOptima, and trade processing services through Traiana.
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Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Source: Jim Mintert,
765-494-4310, jmintert@purdue.edu
Related website:
Purdue University Center for Commercial
Agriculture: http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: Farmer sentiment improves following USDA's
second MFP payment announcement and Farm Bill approval, according
to latest Purdue/CME Group Ag Economy
Barometer. (Purdue/CME Group Ag Economy
Barometer/James Mintert)
A publication-quality photo is available at
https://news.uns.purdue.edu/images/2019/january-barometer.jpg
CME-G
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SOURCE CME Group